Fortnightly, 2 December 2015

The 2015-2016 State Budget Bill was approved by a vote of 61 to 59 overnight on 19 November, following a marathon Knesset debate – including some 400 votes – that involved numerous procedural dramas. Early on, a technical glitch led to improper tabulation of electronic votes. As a consequence, one objection — to stifle the passage of certain provisions — was adopted by the Knesset. This prompted Knesset Speaker Edelstein to order a re-vote on many provisions.

With the coalition commanding a razor-thin majority of two, the debate quickly devolved into a shouting match and at one point the opposition won a symbolic victory when a certain provision was temporarily rejected because there was a tie (60-60). The slew of plenum votes included the passage of a new Arrangements Law, comprising two separate bills: the Economic Plan Bill (passed by a vote of 59 to 57) and the Economic Streamlining Bill, which passed by a vote of 57 to 55.

At one point, Prime Minister Netanyahu’s electronic voting device malfunctioned, but it was eventually fixed. Opposition Leader Isaac Herzog accidentally voted with the coalition on one provision, and later, members of the Arab parties broke ranks with the opposition when defense items were submitted for a vote.

The state budget amounts to $84.5 billion in 2015 and $89 billion in 2016. The deficit ceiling for those two fiscal years was set at 2.9% of GDP. The Arrangements Law, passed separately, included many reforms, among them: new regulatory measures dealing with Dead Sea minerals; the establishment of a national authority to regulate electricity, which would replace the current agency and would report to the Energy Ministry; the expansion of the natural gas grid and the lifting of tariffs on certain dry goods.

As part of the budget, the criteria for child allowances were expanded, making many more families eligible. In addition, $1.3 billion was earmarked for an anti-poverty program and $1.7 billion was added to the Education Ministry. A few hours before the vote, the Finance and Defense Ministries finalized a 5-year defense budget. Its chief provisions include the appropriation of $14.6 billion in 2016 and about $15.4 billion per year in the following years, and major increases in soldiers’ compensation. (Various 19.11)

Back to Table of Contents

1.2 Ishai License Declared Gas Discovery

The Petroleum Commissioner at the Ministry of National Infrastructures, Energy and Water has declared the Ishai gas exploration license to be a discovery. The ministry has thereby answered the question whether the Cypriot Aphrodite reserve is partly in Israel’s economic zone, determining that the Aphrodite 2 drilling carried out in late 2012 in the Ishai license proved that the reserve is partly in the Israeli license and is an economic asset.

Israel Opportunity Energy Resources LP, which holds 16% of the license (subject to approval by the Petroleum Commissioner) expressed great satisfaction at the announcement. The partnership says that the decision by the Ministry of National Infrastructures, Energy and Water, particularly against the background the talks currently underway between the Israeli and Cypriot governments, ensures that Israel’s citizens too will benefit from the huge reserve discovered in Cyprus and that the tax on Israel’s share of the reserve will accrue to the state’s coffers.

The Ishai license is one of five marine drilling licenses known as the Pelagic licenses that spread over a total area of some 772 square miles about 170 kilometers west of Haifa and border on the Gal and Ratio-Yam licenses, in which the Leviathan structure is situated, and Noble Energy’s Block 12 license in Cyprus. In 2010, Israel Opportunity bought 10% of the licenses, and in the past year raised its share to 16%. The other partners in the license are Frendum Investments, Nammax Oil and Gas Ltd., Daden Investment, and AGR Energy Ltd. (Globes 22.11)

Back to Table of Contents

1.3 Israel & Jordan Issue Joint Tender for Red Sea-Dead Sea Canal

On 30 November, Israel and Jordan have announced the issuing of an international tender for the construction of a water canal between the Red Sea and the shrinking Dead Sea. The two countries made their joint announcement following a meeting between Deputy Prime Minister Shalom and Jordanian Water and Irrigation Minister El-Nasser. The meeting was held on the Jordanian side of the Dead Sea.

The canal will carry water from the Red Sea north to the Dead Sea, which has been steadily drying out. A fixed amount of canal water will be siphoned off and desalinated to supply drinking water to Israelis, Jordanians and Palestinians, with the saline byproducts used to replenish the mineral-rich Dead Sea. (Various 01.12)

Back to Table of Contents

1.4 Israel & Australia Boost Research Ties With New Agreement

Israel and Australia signed a number of agreements to boost research and business ties during the first joint investment summit between the two countries taking place in Australia. In the framework of the summit, hosted by the Australian Department of Foreign Affairs and Trade (DFAT) with support from the Israel Trade Commission in Sydney, Israel signed an MNC [multinational companies] agreement with the Commonwealth Bank of Australia (CBA). The agreement creates “a framework which provides a supportive work environment for Israeli startups looking to collaborate with multinational companies.”

Israel and the state of Victoria relaunched VISTECH, an R&D cooperation program that will fund joint projects. Israel has similar strategic agreements with a slew of key trade partners around the world, on both national and state levels.

The week-long summit also includes a start-up competition featuring six Israeli and six Australian companies, and a series of discussion and panels around topics including fintech and cyber-security, cloud infrastructure, e-health, agro-tech and food tech, analytics and customer behavior, new media, innovative ways to invest, IPO versus exits and Impact Investments. (JP 30.11)

Back to Table of Contents

1.5 Greek Prime Minister Vows to Strengthen Ties With Israel

Prime Ministers Alexis Tsipras and Benjamin Netanyahu meet in Jerusalem on 25 November, where Prime Minister Tsipras vowed to strengthen bilateral cooperation with Israel. Tsipras noted that he would opt to broaden energy, tourism and technology cooperation, as well as propose a trilateral summit between Greece, Cyprus and Israel. Netanyahu voiced appreciation for Tsipras’ efforts to improve the Greek economy and added that he would encourage Israeli investment in Greece.

Earlier that day, Tsipras laid a wreath at Jerusalem’s Yad Vashem Holocaust memorial. He was also to meet with President Rivlin and Zionist Union leader Herzog during his time in Israel. Tsipras then met the Greek patriarch in Jerusalem, later traveling to Ramallah to meet Palestinian Authority President Abbas. (Various 26.11)

Back to Table of Contents

2: ISRAEL MARKET & BUSINESS NEWS

2.1 Why the World’s Best Vegetarian Food Is in Tel Aviv

That Tel Aviv is a gourmet destination is celebrated the world over. Conde Nast Traveler has now bestowed a new gastronomic honor on the trend-setting city: world’s vegetarian food capital. The magazine article looks at the “herbivore smorgasbord” on offer and the myriad ethnic influences that keep menus at the city’s eateries so different from one another. “Spending a week going meatless in Tel Aviv isn’t just easy; it lets you sample the city’s best bites. As well, most of these no-meat, no-dairy restaurants are essentially kosher by default, appealing to the young, fresh-food-focused population of the coastal city,” reads the gleaming review of Tel Aviv’s culinary scene. Tel Aviv boasts pure vegetarian and vegan restaurants but even the dining spots with meat on the menu, offer plenty of non-meat options. “In a city where the salad is more likely to be a star entrée rather than a sidelined starter, the fourteen-ingredient tomato salad is, fittingly, Herbert Samuel’s signature dish,” reads the article. (Conde Nast 10.11)

Back to Table of Contents

2.2 BIRD to Invest $5.1 Million in Israel-US Cleantech Projects

The US Department of Energy and Israel’s Ministry of National Infrastructure, Energy and Water Resources have selected six projects to receive $5.1 million under the 2015 Binational Industrial Research and Development (BIRD) Energy program. Each project is conducted by a US and Israeli partner. Selected projects address energy challenges and opportunities of interest to both countries, while focusing on commercializing clean energy technologies that improve economic competitiveness, create jobs, and support innovative companies. The selected projects will leverage private sector cost-share for a total project value of $11.3 million. This is the seventh round of funding for BIRD Energy which has approved 28 projects with a total investment of about $22 million (including the projects in the current annual cycle). The six approved projects are:

3GSOLAR Photovoltaics (Jerusalem, Israel) and Arkema (King of Prussia, PA) will develop thin and flexible printed solar photovoltaics for wireless electronics.

Ayyeka Technologies (Jerusalem, Israel) and UIS Holdings (Dexter, MI), will develop smart grid to distribution enclosures: out-of-the box remote metering, efficiency analytics and performance enhancement.

Haogenplast (Kibbutz Haogen, Israel) and Global Solar Energy (Tucson, AZ), will develop solar energy production over water reservoirs.

Pentalum Technologies (Rehovot, Israel) and Texas Tech University (Lubbock, TX), will collaborate on the development of a light detection and ranging ( LiDAR) based wind farm controller and optimizer.

Solaris-Synergy (Jerusalem, Israel) and Pristine Sun (San Francisco, CA), will collaborate on a utility scale, low-cost floating photovoltaic solar energy system for deployment on water.

Yissum – The Hebrew University of Jerusalem (Jerusalem, Israel) and Applied Biomathematics (Setauket, NY) will collaborate on technology to protect birds and bats near wind energy facilities. (BIRD Energy 24.11)

Back to Table of Contents

2.3 ColorChip Raises $25 Million to Support Major Data Centers

ColorChip received funding led by IGP. Vintage, Gemini Israel Funds, and BRM Group also invest to help top-tier data centers manage the explosion of web traffic. The round was led by Israel Growth Partners, a tech-focused growth equity fund with participation from Vintage Investment Partners, and existing investors Gemini Israeli Funds and BRM Group. IGP General Partner Haim Shani will be joining the ColorChip Board of Directors. To date, the company has raised $60m with Gemini and BRM leading the previous rounds.

Yokneam’s ColorChip, a privately held Israeli company that provides cost effective, dense, hyper-scale transceivers and advanced optical splitters, has raised $25m in growth-funding to scale up its operations and accelerate its product roadmap. ColorChip has developed unique SystemOnGlass technology – a hybrid optical integrated circuit. ColorChip uses glass wafers to industrialize its optical devices, allowing for cost effective, rapid, and highly scalable production. In essence, this allows the company to bring efficiencies commonly only seen in semiconductor fabrication to the world of optical communications. ColorChip is also unique in the Israeli landscape, since it not only develops its solutions but is also vertically integrated and manufactures its core technology in its wholly owned and operated state of the art fab in Israel. The fab utilizes the company’s unique IP and is a critical component of its core technology, positioning the company as a leader in the industrialized manufacture of optical assemblies. (ColorChip 23.11)

Back to Table of Contents

2.4 WakingApp Raises $4.3 Million to Bring Augmented Reality to the Masses

Rosh HaAyin’s WakingApp announced the raising of $4.3 million in Series C funding from Youzu Interactive, as well as one of largest internet and search companies in China. Funds from the round will be used toward expanding the company’s AR/VR platform offerings, ENTiTi Creator and ENTiTi Viewer, and expanding its sales, marketing and business development in the United States and China. The two Chinese companies join existing investors Inimiti VC and Globis Capital in the round. For Youzu, an entertainment company specializing in online game development and distribution, this is its first investment in an Israeli-based startup and represents an opportunity to move AR/VR content creation tools into the Chinese market.

Founded in 2013, WakingApp‘s vision is to revolutionize augmented reality and virtual reality content creation through free and unlimited tools that enable the effortless creation of AR/VR content that makes a user’s dreams, reality. The company’s unique AR/VR cloud platform (ENTiTi Creator) allows any company or individual – no programming skills necessary – to create advanced interactive content that includes live data feeds, personalization, social activities, high-quality 3D imaging and animation, games, and more. (WakingApp 04.11)

Back to Table of Contents

2.5 GreenSoil Raising €50-70 Million for FoodTech Investments

Ra’anana’s GreenSoil Investments is raising €50-70 million for investing in European and Israeli companies, to be split equally between the two. Since it was founded, the firm has managed assets of $35 million, and invested in six portfolio companies. The companies in GreenSoil’s portfolio have attracted attention from large institutional investors. Horizon Ventures, from Hong Kong billionaire Li Ka-shing, has invested in Tipa and Google chief Eric Schmidt’s Innovation Endeavors has invested in CropX. (GreenSoil 24.11)

Back to Table of Contents

2.6 Iguaz.io Raises $15 Million in Series A Funding to Disrupt Big Data Storage

Iguaz.io announced a $15 million Series A funding round. Led by Magma Venture Partners, the funding includes additional investments from JVP and large strategic investors. The iguaz.io founding team is comprised of a group of former executives from successful technology companies in the fields of storage, cloud computing, high-speed networking, analytics and cyber-security. Herzliya’s Iguaz.io provides innovative data management and storage solutions for Big Data, IoT and Cloud applications. Iguaz.io was founded by industry experts and innovators and is backed by top investors including Magma Venture Partners, Jerusalem Venture Partners and large strategic investors. (iguaz.io 25.11)

Back to Table of Contents

2.7 Trendlines IPO Completed with Strong Investor Interest

The Trendlines Group announced that further to the launch of its initial public offering on the Catalist of the Singapore Exchange Securities Trading Limited on 16 November 2015, the placement of the IPO shares has been successfully completed. Trendlines offered 75,760,000 placement shares at S$0.33 per share, which was approximately 1.4 times price-to-book of Trendlines’ net tangible assets value as at 30 June 2015. Trendlines received strong interest from investors during the road show, and indications of interests from investors significantly exceeded the number of shares offered. A total of S$25 million ($17.7 million) was raised, including S$7.1 million ($5 million) from cornerstone investor B. BRAUN Melsungen, a healthcare supplier with global sales of healthcare products of €5.43 billion. In the pre-IPO stage, Trendlines raised S$13.7 million ($9.7 million) from investors, bringing total IPO-related proceeds to S$38.7 million ($27.4 million).

Misgav’s The Trendlines Group discovers, invests in, incubates and provides supports life sciences companies in the fields of medical and agricultural technologies in line with its mission to improve the human condition. (Trendlines 26.11)

Back to Table of Contents

2.8 Regulator Seen Approving Fosun Acquisition of Phoenix

China’s Fosun is due to pay NIS 1.8 billion for Delek Group’s entire 52.3% stake in Israeli insurance company Phoenix. Commissioner of Capital Markets, Insurance and Savings at the Ministry of Finance is leaning towards approval of the deal, according to market sources. In late June, Fosun signed a binding agreement to buy the controlling stake in Phoenix after less than six months of negotiations. Fosun is due to pay NIS 1.8 billion for Delek Group’s entire 52.3% stake in Phoenix, which gives the insurance company a valuation of NIS 3.5 billion.

Delek Group will not post a gain from the Phoenix deal and it is close to selling off all its financial holdings, which have turned out not to be a successful investment for it, yielding too low a return. Delek Group had three holdings in financial services companies: Phoenix, US insurance company Republic and Barak Capital. The sale of its Phoenix stake furthers Delek Group’s strategy of transforming itself from a diversified holding company to a group focused on energy and hydrocarbon exploration. (Globes 30.11)

Back to Table of Contents

3: REGIONAL PRIVATE SECTOR NEWS

3.1 Tetra Tech Wins $46 Million USAID Rule of Law Project

Pasadena, California’s Tetra Tech announced that the U.S. Agency for International Development (USAID) has awarded the company a five year, $46 million single-award task order under their existing Rule of Law contract to support continued improvement of government and social systems in Jordan.

Jordan faces numerous social challenges including water scarcity and reliance on costly imported energy resources. Tetra Tech will assist Jordan’s government in addressing many of these core issues by supporting USAID/Jordan’s overall mission of improved prosperity, accountability, and equality for a stable, democratic Jordan. Tetra Tech will provide technical services to enhance Jordan’s governance to improve health, social, and educational systems; promote broad-based economic growth and development; and protect and strengthen human and legal rights. (Tetra Tech 18.11)

Back to Table of Contents

3.2 GCC Buyers Rush to Snap Up Turkish Real Estate Since Law Changed

Following the 2012 liberalization of foreign investment law in Turkey, there has been a five-fold rise in investment from the GCC, which accounts for 24% of the total, said figures released by REIDIN, the real estate information company. At Cityscape Global 2015 in Dubai, 52 stands out of 369 in total were from Turkey while Istanbul has a strong appeal for visitors from the region, with a 450% increase in tourists from the Gulf in the last two years. (AB 23.11)

Back to Table of Contents

3.3 Clarabridge Partners with OBASE and CMCS

Reston, Virginia’s Clarabridge, a leading provider of intelligent Customer Experience Management (CEM) solutions for the world’s top brands, announced that it has further expanded its business globally into Turkey and UAE with partners OBASE and CMCS.

OBASE is a software and consultancy company located in Istanbul, Turkey with expertise in Business Intelligence, Retail Solutions and Analytical Solutions. As a new partner, OBASE will offer the Clarabridge solution to its customers and deliver strategic advisory services along with implementation and deployment of the Clarabridge CX Suite. OBASE will be critical in helping to introduce CEM in the Middle East. CMCS, headquartered in Dubai, UAE, provides sustainable integrated 360-degree project portfolio management (PPM) solutions for project-based organizations. By partnering with Clarabridge, CMCS will lead the way in expanding Customer Experience Management principles throughout the world. (Clarabridge 18.11)

Back to Table of Contents

3.4 UAE’s Taqa Seeks to Sell Stake in US Wind Power Plant

Abu Dhabi National Energy Co, or TAQA, has filed with US energy regulators to sell its stake in the Lakefield wind power plant in the US state of Minnesota to a Qatari company. TAQA, which reported a net loss of $113.3 million for the quarter ending Sept. 30, said earlier this month it was aiming to develop local oil and gas projects, leveraging on its overseas expertise and signaling a shift in strategy.

TAQA, majority-owned by the government of Abu Dhabi, bought a 50% stake in the 205.5 MW project from a subsidiary of France’s EDF in early 2013. It is the only wind power holding in TAQA’s portfolio and the company said earlier this year it had decided to sell the asset, given a “carrying value” of $40 million which it said was expected to be surpassed in the sale. Nebaras Power Co is owned 60% by Qatar Electricity & Water Co, 20% by Qatar Holding LLC and 20% by Qatar Petroleum International Ltd. (Reuters 25.11)

Back to Table of Contents

3.5 World’s Largest Indoor Theme Park to Open in Dubai in Early 2016

The world’s largest indoor theme park being built in Dubai will open in early 2016, it was announced by IMG Theme Park. IMG Worlds of Adventure is a themed entertainment destination, with four epic adventure zones – Cartoon Network, MARVEL, Lost Valley – Dinosaur Adventure and IMG Boulevard. The park will have the capacity to welcome more than 20,000 guests a day and will be the world’s largest indoor theme park at 1.5 million square feet. (IMG 30.11)

Back to Table of Contents

3.6 Top Austrian University to Open First Overseas Campus in Dubai

Dubai Investments said on 24 November it has invested 90% of the total project cost to build Austria’s Modul University Vienna’s first campus in Dubai. Dach Advisory Group holds the remaining 10% stake in the venture to bring Austria’s leading private university to the emirate. The new campus, spread across 25,000 square feet and Modul’s first outside Austria, will be built at Dubai Multi Commodities Centre in Jumeirah Lake Towers. The campus will be fully operational by September 2016; with admissions commencing in Q1/16.

The Modul University Dubai campus will offer undergraduate, graduate and MBA degree programs, including BBA and MBA in hospitality and tourism management, Bachelor of Science degree in international management, MBA in New Media management and Masters of Science degree in Sustainable Development Management, offered by Tourism College Modul. Short-term vocational courses, spanning six months to one year duration, will also be offered for hospitality professionals in the UAE. (AB 24.11)

Back to Table of Contents

3.7 US-Based Greek Restaurant Brand Debuts in Dubai

Landmark Group, the UAE-based retail and hospitality conglomerate, has launched the first GRK Fresh Greek restaurant outside the US at the recently opened City Centre Me’aisem in Dubai. Foodmark, the food and beverage division of Landmark Group, has been working on the launch of the brand in the region over the last year after entering a master franchise development agreement to develop GRK Fresh Greek across the GCC. Under the deal, the first five restaurants are expected to open across the UAE by the end of 2016.

GRK Fresh Greek in the UAE will introduce a new signature product unique to the region. The Bifteki is a traditional beef patty made with olive oil, spices and herbs. All vegetables served will be sourced locally, while a range of traditional Greek spices, meats and delicacies used as ingredients are imported from the US and Greece. Foodmark is the food and beverage division of Landmark Group, one of the largest and most successful retailers in the MENA region with market leading brands in apparel, furnishings, electronics and leisure. (AB 20.11)

Back to Table of Contents

3.8 UAE Healthcare Firm Invests $189 Million in IVF Treatment

UAE-based healthcare firm NMC Health has announced a deal to acquire a 51% stake in Fakih IVF Group for $189 million. NMC said that it has also agreed a mechanism by which it could increase its stake in Fakih IVF over time, based on certain conditions being met. Fakih IVF, which comprises of Fakih IVF and Fakih IVF Fertility Centre, is the Middle East market leader for in-vitro fertilization (IVF) services, performing over 4,000 IVF cycles per year. Fakih IVF currently operates centers in both Abu Dhabi and Dubai and is looking to expand its footprint within the UAE as well as in the Gulf region. It is expected to open three additional UAE centers during 2016, while IVF centers are also expected to open in Qatar and Oman before the end of next year. (AB 24.11)

Back to Table of Contents

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Israel’s Transportation Ministry Offers Grants for Natural Gas Buses

Transportation Minister Yisrael Katz announced on 23 November that his ministry is offering grants of about $39,000 per bus to public transportation companies that purchase natural gas powered buses for their fleets. Katz added that his ministry has allocated $3.9 million to encourage the purchase of 100 new municipal buses to replace existing buses powered by diesel fuel. Egged and Dan, the largest public transportation operators in Israel, began testing the new type of natural gas vehicle in June 2015. According to Katz, the use of vehicles powered by gas or electricity is expected to save energy and reduce air pollution. (Various 24.11)

Back to Table of Contents

4.2 Renewable Energy Investments in Jordan Worth Over JD 1 Billion

Investments in Jordan’s renewable energy sector exceed JD1 billion at present and are expected to increase significantly in the next few years as more projects are in the pipeline, according to the Jordan Investment Commission (JIC). The entire ecosystem for renewable energy projects in Jordan is promising and encouraging as studies by energy authorities indicate that the Kingdom has more than 300 sunny days a year, according to experts. In addition, wind speeds in the northern region reach as high as 7.5 meters per second and 11.5 meters per second in the eastern areas of the country.

Earlier, Abdul Latif Jameel Energy and Environmental Services, and its portfolio company Fotowatio Renewable Ventures (FRV), a developer of large-scale solar power plants, announced the signing of a power purchase agreement (PPA) for a planned 50 MW solar photovoltaic power plant in Jordan. The PPA, which was signed with the National Electric Power Company, is valid for 20 years. The PPA was signed at 4.898 piasters (6.93 cents) per kilowatt-hour. To be established in Mafraq, in the northern region, the plant is part of the government’s plans to generate 10% of its energy from renewable sources by 2020.

Scheduled to commence operations in 2017, the power plant represents 1% of Jordan’s overall generation capacity and will supply 155 million kilowatt hours of electricity per year, sufficient to power over 40,000 average homes in the country, according to the company. The project is the first of four solar power plants to be built in Jordan as part of the second round of the Kingdom’s solar independent power producer tender, totaling 200MW.

Jordan imports about 97% of its energy needs annually at about 18% of the GDP. Renewable energy projects with a total capacity of 1,600MW will be operational by 2018, Energy Minister Ibrahim Saif told the press this week. These projects will increase the grid’s capacity from 4,000MW to 5,600MW. (JT 25.11)

Back to Table of Contents

4.3 Dubai Clean Energy Strategy 2050 Launched

Sheikh Mohammad Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, launched the Dubai Clean Energy Strategy 2050, which aims to make Dubai a global center of clean energy and green economy. The strategy includes Dh100 billion investment in Green Fund and Dh50 billion in the second phase of Solar Park by 2030.

Shaikh Mohammad said that the UAE, through its diverse strategies and investments in clean and renewable energy, is now leading global efforts in this area, despite having the second-largest oil reserves in the world.

The solar park is considered the largest of its kind in the world, and will produce 5,000 MW in a single location by 2030 and involves total investments worth Dh50 billion. He also inaugurated the construction works of Dewa Innovation Centre, which includes under its umbrella a group of research and development laboratories in the field of clean energy with a total investment of Dh500 million. The Dubai Clean Energy Strategy aims to provide 7% of Dubai’s energy from clean energy sources by 2020. It will increase this target to 25% by 2030 and 75% by 2050.

The infrastructure pillar also includes the establishment of a new free zone under the name ‘Dubai Green Zone’ dedicated to attracting research and development centers and emerging companies in the field of clean energy. (WAM 28.11)

Back to Table of Contents

4.4 Egypt Inaugurates MENA’s Largest Wind Power Station Along Red Sea

Egypt inaugurated the largest wind power station in the MENA region, with a capacity of 200 megawatts (MW), located in Gabal Al-Zeit area, Red Sea governorate. The project’s cost is estimated at €270, financed through two loans from German KFW development bank, European Investment Bank, and a grant from EU Commission in Egypt. The project will be able to generate an annual 800 million kilowatts/hour. The project’s execution has taken around 30 months with the deal being signed in December 2008. The delay in implementation was due to the 2011 uprising and the subsequent developments.

In June, the Egyptian government signed €8 billion with renowned German industrial company Siemens to establish three high-efficiency natural gas power plants and wind power installations at a capacity of 16000 MW. (Ahram Online 29.11)

Back to Table of Contents

4.5 Morocco is One of the 4 Greenest Countries in the World

Morocco is one of the top four countries in the world recognized as a model for the environment due to its commitment to achieve the objectives of the COP21 (2015 United Nations Climate Change Conference). According to a study conducted by Climate Action Tracker as part of the COP21 being held in Paris, Morocco, along with Bhutan, Ethiopia and Costa Rica earned the classification as the greenest countries in the world. Morocco plans to reduce its greenhouse gas emissions by 13% by 2030.

With sufficient international support, Morocco would decrease emissions further, by 32% below BAU by 2030 (or to four times its 1990 levels). While Morocco’s unconditional INDC begins to slow the growth of emissions, Morocco proposes to go much further if financial support is provided: to stop its emissions growth and implement an ambitious target of 42% renewable electricity generation by 2020. Based on these targets, Morocco is rated “Sufficient.”

“Sufficient” rating indicates that both Morocco’s unconditional and conditional targets are at the more ambitious end of its fair contribution. This means Morocco is doing its “fair share” of global efforts to hold warming below 2°C,” it added. (MWN 30.11)

Back to Table of Contents

5: ARAB STATE DEVELOPMENTS

5.1 Lebanon’s Deflation Reaches 4.08% in October 2015

According to the Central Administration of Statistics (CAS), consumer prices in Lebanon fell by 4.08% in October since the Consumer Price Index (CPI) declined from 100.97 in October 2014 to 96.84 in October 2015. On a year-to-date basis, consumer prices fell by 2.46% on account of subdued energy prices but also on account of a weaker euro, especially since around 40% of Lebanon’s imports come from Europe. The common-currency lost 9% since year start, going from €/$ 1.2097 in December to €/$ 1.1005 in October 2015. October’s deflation was mainly due to lower energy prices. Due to oversupply on the market, the price of Brent crude oil was slashed by a yearly 42% from $85.86/per barrel in October 2014 to $49.56 per barrel in October 2015. This was reflected by the 19.61% y-o-y slump in the price of “water, electricity gas and other fuels”, a component with a weight of 11.9 in the CPI. With cheaper oil, the price of transportation also declined by 12.71% in October 2015. The basket of food and non-alcoholic beverages is also responsible for October’s deflation. This basket holds a share of 20.6 in the CPI and its price slid by 0.79% y-o-y. In spite of lower energy and F&B prices, some baskets of goods and services witnessed price upturns in October. Education prices, with a weight of 5.9 in the CPI, rose by a yearly 1.52% while the prices of clothing and footwear, with a weight of 5.4 in the CPI, increased by 1.37%. (CAS 24.11)

Back to Table of Contents

5.2 Jordan Second in Arab World in Mobile Market Competitiveness

Jordan was ranked the second most competitive cellular market in the Arab world by the Arab Advisors Group. Saudi Arabia ranked first in the Arab Advisors Group’s Cellular Competition Intensity Index 2015, followed by Jordan and the Palestinian Authority. These top three countries maintained their rankings from 2014. Saudi Arabia scored 85.08%, followed by Jordan (75.92%), the Palestinian Authority (75.19%), Iraq (69.76%), Bahrain (65.33%) and Egypt (64.48%). Tunisia maintained its seventh-place ranking from 2014 with 62.45%, followed by Kuwait (61.43%). Morocco, Oman and Algeria saw drops in the ranking with 61.52%, 61.21% and 60.23% respectively. Yemen was in 12th place with a score of 57.97%, followed by Sudan (57.39%), Mauritania (56.31%), United Arab Emirates (51.32%), Qatar (50.80%) and Lebanon (41.83%). Libya and Syria were at the bottom of the list, with scores of 35.20% and 34.99% respectively.

The categories include the number of licensed and expected mobile network operators in 2015, the number of working operators, the market share of the largest operator, the number of prepaid plans available and the number of postpaid plans, as well as the availability of smartphone plans, corporate offers, third or fourth generation services, and operational international long distance competition. (GSMA 30.11)

Back to Table of Contents

5.3 Cheap Oil has Shale Oil Investors Defer Jordanian Ventures

It seems that cheap oil has taken a toll on energy-hungry Jordan as investors, who planned to tap the Kingdom’s abundant shale oil deposits, seek to put their investments on hold, at least for now. Oil, which is now in the vicinity of $45 a barrel, makes it very difficult for frackers to take the plunge and press ahead with much costlier oil extraction projects.

The Jordanian government has recently set up a committee to negotiate with oil shale investors, who have already secured concession areas, to reach what Al Ghad described as “understandings” over possible deferral of their ventures. Over the past 12 months, crude oil prices tumbled from $80 a barrel from this time last year to nearly $45 a barrel at present, with sustained downbeat projections that recovery might take longer than expected. Jordan, which has already sealed deals with a number of foreign companies to invest in its shale oil reserves, imports some 97% of its energy annually at roughly 18% of its GDP. (AME 23.11)

Back to Table of Contents

►►Arabian Gulf

5.4 GCC Set to See $24.7 Billion Bill for Diabetes Care by 2035

The cost of diabetes care in the Arabian Gulf region totaled nearly $17 billion last year and is expected to rise to $24.7 billion by 2035 the Economist Intelligence Unit (EIU), which calls on policymakers in the Gulf to do more to address the growing challenge of diabetes. It highlights the sharp rise in prevalence of diabetes and the associated rising economic costs and calls for a coherent region-wide approach to tackle the issue.

The report said diabetes is a “ticking time bomb” in the region. Data from the International Diabetes Federation (IDF) shows that prevalence of the disease has reached 23.9% of the adult population in Saudi Arabia, 23.1% in Kuwait and 19.8% in Qatar, over twice the global average of 8.3%. Obesity, brought on by rising economic prosperity, are to blame for driving the diabetes epidemic in this region, with up to 75% of adults and up to 40% of under-18s overweight or obese. Consequently, the financial burden of diabetes in the region is high and has the potential to rise even further, EIU said. Healthcare investment in the Gulf region ranges from 2.2-4.9% of GDP in 2012, far below the OECD average of 8.9% of GDP. (AB 27.11)

Back to Table of Contents

5.5 Bahrain’s Inflation Rises in October as Meat Subsidies End

Bahrain’s annual inflation rose to 2.3% in October following the removal of a decision by the government to remove meat subsidies as it tries to save money amid continuing low oil prices. Last month, Bahrain more than doubled prices of beef and chicken as it removed meat subsidies. Local citizens but not foreigners will receive some compensation in the form of cash handouts. In April, the government raised the price of natural gas sold to industry.

Housing and utility costs, which account for 24% of consumer expenses, rose 3.1% in October from a year earlier. Prices of food and non-alcoholic beverages, which account for 16% of the basket, jumped 8.9% after the removal of meat subsidies.

Like other Gulf oil-exporting states, Bahrain has for many years subsidized goods and services such as food, fuel, electricity and water, keeping prices ultra-low in an effort to maintain social peace. But since its oil income began to plunge last year, the government’s budget deficit has widened and the subsidies have become much harder for Bahrain to afford. Governments around the Gulf have begun restraining expenditure and studying whether to cut subsidies, but most do not face as much pressure as Bahrain, which lacks the huge financial reserves of its neighbors. Bahrain’s revenues have dropped 60 – 70% because of low oil prices. (AB 27.11)

Back to Table of Contents

5.6 Dubai’s Sheikh Mohammed Launches $544 Million Fund to Support Innovators

A $544 million fund which aims to provide finance to UAE innovators was launched on 24 November by Sheikh Mohammed bin Rashid Al Maktoum, the UAE’s Vice President and Prime Minister and Ruler of Dubai. The Sheikh Mohammed bin Rashid Al Maktoum Fund to Finance Innovation is designed to support innovators across various sectors and help them transform ideas into innovation projects. The fund is a federal government initiative represented by the Ministry of Finance and will create a supportive environment for innovation through the collaboration of various financial institutions and funding entities within the UAE, including commercial banks, investment funds, family businesses and other funding entities.

Specific phases for the development of the fund have been established with the pilot phase being launched during the first half of 2016. This will be followed by the official launch of the fund’s operations in the second half of 2016. Eligible applicants need to have registered their project as intellectual property and the initial stage of the project must already be established. The fund will provide support to all projects, prioritizing those related to the seven sectors outlined in the national innovation strategy – renewable energy, transport, education, health, technology, water and space. (GN 24.11)

Back to Table of Contents

►►North Africa

5.7 Egypt Targets 5 – 5.5% Growth, 9 – 9.5% Budget Deficit in 2016/17

Egypt is targeting a budget deficit of around 9 to 9.5% and a growth rate of around 5 to 5.5% for the fiscal year beginning July 2016, the Ministry of Finance announced on 30 November. Cairo plans to reduce public debt to 88 to 90% of GDP and the unemployment rate to 10%. The government also hopes to reduce the deficit by raising more revenues by merging the informal sector with the formal economy and implementing the value-add tax. A system for allocating finances to ministry-specific programs will be expanded to seven new ministries including health and education, according to the statement.

Egypt’s budget deficit hit 11.5% in the fiscal year 2014/15 down from 12.2% in the same period the previous year, with growth estimated to reach 4.2% in the same period. (Ahram Online 30.11)

Back to Table of Contents

5.8 Moody’s Raises Egypt’s Credit Risk due to Ailing Economy:

Recent deterioration in Egypt’s economic outlook has led to a sharp increase in the country’s sovereign risk profile, international credit rating agency Moody’s said in a recent report. The one-year External Default Frequency (EDF) for Egyptian government debt increased from 0.09% in early October to 0.18% in the week ending on 20 November. Egypt’s five-year Sovereign EDF, meanwhile, rose from a low of 0.68% to the current figure of 1.18%, the report added.

In early November, Moody’s declared that the reforms applied to the Egyptian economy showed improvements in Egypt’s public finances and economic conditions. The ratings agency noted that there are still challenges, including the government’s large financing needs, structural economic issues such as high unemployment and inflation, and elevated political risks. In the report, Moody’s projections reveal a GDP growth of 5% for the current fiscal year (FY) 2015/2016, up from 4.5% in FY 2014/2015. The report said the introduction of the value-added tax, as a replacement for the current sales tax, was delayed several times, although the government aims to implement it before the end of 2015. (DNE 30.11)

Back to Table of Contents

5.9 Kuwaiti Fund to Finance Egyptian Projects With $1.5 Billion

The Kuwait Fund for Arab Economic Development has announced it is allocating $1.5 billion to finance Egyptian projects, particularly in housing. The fund’s money will be delivered in annual instalments of $300 million over five years. It is not yet clear whether the financing constitutes a loan or a grant. The fund also signed a $95 million loan agreement with the Egyptian minister of international cooperation to assist in financing the Egyptian side of the power interconnection project between Egypt and Saudi Arabia. The loan represents 15% of the total cost of the Egyptian share of the project and is to be repaid over 25 years at 2.5% interest rate, the fund added. Egypt’s government expects to receive a total of $1.5 billion in loans from the World Bank and African Development Bank before the end of 2015. (Ahram Online 24.11)

Back to Table of Contents

5.10 Saudi Arabia Grants Egypt $100 Million Loan for Power Station

Saudi Arabia announced that the Saudi Fund for Development board has recently approved a loan to Egypt worth $100 million. The loan will help finance the expansion project of the West Cairo power station to generate 650 MW. The KSA will continue to support Egypt in all fields, emphasizing the strength of relations between the two countries. (Al-Masry Al-Youm 25.11)

Back to Table of Contents

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Simsek to Become Turkey’s New Economy Chief

Former Turkish Finance Minister Mehmet Simsek will be in charge of the economy in a new cabinet named by Prime Minister Ahmet Davutoglu on 24 November. Simsek, who has been seen as the architect of Turkey’s recent fiscal success and a credible reformist figure in the cabinet, would take over management of the economy, a post held in the past by Ali Babacan, who has been seen as fairly credible by the markets but was not appointed to the new cabinet.

Babacan, who frequently found himself at odds with Erdogan’s demands to cut interest rates in recent months against the background of a plunging Turkish Lira and deep political uncertainty, was reportedly persuaded to continue his political career with the Justice and Development Party (AKP) in the 1 November elections thanks to the personal efforts of Davutoglu. However, Babacan was said to be unwilling to take part in the government if he was not given control over the economy.

Many of Erdogan’s closest allies have been appointed to key roles in Turkey’s 64th cabinet. Istanbul deputy Berat Albayrak, Erdogan’s son-in-law, who was also being touted for a possible role in economic management, was appointed as the new energy and natural resources minister. This ministerial position has been quite crucial in terms of its ongoing and projected business overload. Turkey plans to make over $135 billion in investments in the energy sector by 2023.

The new economic administration will need to deal with a number of challenging issues in the economy after an extended period of elections. Top business leaders have long voiced their strong need for the realization of a robust reform agenda to enable the country to overcome a middle-income trap, shift the country’s production to a higher quality mood and increase both investments and exports in a highly fluctuating climate both inside and outside. Additionally, steep fluctuations in the lira’s value for the last two years have not helped the business world ahead of an expected rate hike by the U.S. Federal Reserve.

Many sectors have also been negatively affected from the rising security concerns around Turkey, including the tourism sector and exports. The country’s exports saw an 8.6% drop to $119.6 billion in the first ten months of the year compared to the same period of 2014, according to semi-official data. Tourism revenues in Turkey declined 4.4% to $12.29 billion in the third quarter, the Turkish Statistics Institute (TUIK) said amid security concerns and a decrease in the number of Russian tourists visiting the country. (HDN 24.11)

Back to Table of Contents

6.2 Turkey’s Foreign Trade Deficit Drops 42.5% in October

Turkey’s foreign trade deficit declined by 42.5% year-on-year in October due to a continuing decline in the country’s imports, the Turkish Statistical Institute (TUIK) stated on 30 November. The foreign trade gap dropped from $6.3 billion to $3.6 billion in October. Exports were $13.3 billion with a 3.1% increase compared to October 2014, while imports were $16.9 billion with an 11.9% decrease, according to the data.

Turkey’s exports in the first 10 months of 2015 fell by 8.2% to $120.5 billion, from $131.3 billion in the same period of last year, while imports saw a 13% decline in the same period from $199 billion to $173.23 billion. The drop in the value of Turkey’s exports was due to the decrease of around 17.2% in euro-dollar parity in the first 10 months of the year.

Compared to October last year, exports to the 28 members of the EU increased by 10.7%, from $5.7 million to $6.3 billion. The proportion of EU countries in Turkey’s overall exports was 47.3% in October 2015, up from 44.1% in October 2014. In October 2015, the main partner country for Turkey’s exports was Germany with $1.3 billion, followed by the U.K. ($986 million), Iraq ($870 million) and Italy ($707 million). In October 2015, the top country for Turkey’s imports was China with $2.3 billion, followed by Germany ($1.8 billion), Russia ($1.5 billion dollars) and Italy ($925 million). (TUIK 30.11)

Back to Table of Contents

6.3 Fewer Foreign Visitors to Turkey in October

The number of foreign visitors to Turkey fell 4.02% year-on-year in October to 3.301 million people, data from the Tourism Ministry showed. In the first 10 months of 2015, the number of foreign visitors dropped 1.4% year-on-year to 33.059 million. Turkish tourism sector is set for a sharp decline through the end of 2015 following the diplomatic crisis with Russia, for Turkey, the source of the second-largest number of tourist arrivals to Turkey after Germany. About 4.4 million Russians, including 3.3 million Russian tourists, visited Turkey in 2014. (Zaman 27.11)

Back to Table of Contents

6.4 Turkey Could Lose as Much as $3 Billion in Russian Tourism

Annual tourism revenue of $4 billion from Russian visitors to Turkey could melt down by as much as 75% unless Moscow drops the official call for the cancellation of trips to Turkey. Russians are second only to Germans in terms of numbers visiting Turkey, bringing in an estimated $4 billion a year in tourism revenue.

Turkey is already suffering from a steady decline in Russian tourist numbers due to a ruble crisis in Russia and the jet downing incident is only fanning the flames. Turkey could see its annual revenues from Russian visitors drop to even $1 billion from what is currently $4 billion. In 2014, 4.48 million Russian tourists visited Turkey, bringing in revenue of nearly $4 billion, official figures showed. Turkey hosts some 40 million tourists who generate $34.3 billion in revenue every year. The Russian Association of Travel Agencies said that several Russian agencies have stopped selling package tours to Turkey following an official travel warning about a potential threat to Russian citizens there. (Zaman 25.11)

Back to Table of Contents

6.5 Greek Economy Contracts 0.9% in Third Quarter

Elstat, Greece’s state statistics agency, on 27 November drastically revised downwards the economy’s third-quarter contraction to 0.9%, from the 0.5% announced previously. These differences reflect new data not available at the time of the initial estimate. In an annual comparison, Greek output fell by 1.1% from Q3/14, Elstat said. The flash estimate on November 13 had pointed to a 0.4% drop from last year. The data is consistent with European Commission forecasts that Greece will fall back into recession in 2015 after a brief respite last year. The Commission is banking on a 1.4% contraction in 2015 and a further drop of 1.3% in 2016.

Greece’s own 2016 budget, to be approved by parliament in early December, foresees “near zero” growth in 2015 and a 0.7% economic downturn next year. Although Greece had a record tourism year, the gains were lost to economic uncertainty as the leftist government of PM Tsipras clashed with international creditors in June and imposed capital controls. (Elstat 27.11)

Back to Table of Contents

6.6 Greek Budget Data Reveals an Alarming State of Affairs

The alarming state of the Greece’s social security funds and the state budget in general, is reflected in the fiscal data for the first 10 months of the year. The needs of the pension funds have even exceeded the estimates made in early October, while the government is continuing its payments freeze due to the shortage in revenues so that it can finance the inflexible expenditure for salaries and pensions.

In total budget spending in the year to end-October was €4.1 billion short of that foreseen in the first draft of the 2016 budget in early October. That shortfall resulted from the €3.1 billion payment halt in the public sector, as well as the €1 billion cut in spending by the Public Investments Program.

However, it is mainly the data regarding the funding of social security funds that provide the greatest cause for concern: The fund for the self-employed (OAEE) has exceeded the provision for its annual funding. At end-October it had already received 107.9% of its annual credit, in order to meet its obligations. Similarly, the Social Security Foundation (IKA) had by 31 October received 92.3% of its funds for the entire year, the farmers’ fund (OGA) had received 84.8% and the Healthcare Service Organization (EOPYY) 83.2%.

At the same time, the government has frozen huge chunks of benefits to be able to pay salaries and pensions and maintain the primary budget surpluses. Therefore, it has paid out only 49.1% of the annual funds to hospitals, 35.5% of funds to families with four or more children, 67% of the subsidies to various entities, and so on. (Ekathimerini 25.11)

Back to Table of Contents

6.7 Greek Shopping With Debit or Credit Cards Becomes More Popular

The introduction of capital controls brought about massive growth in the use of credit and debit cards at Greek supermarkets. Despite the fact that the controls have been relaxed since the summer, this rise in cashless transactions by consumers appears to be continuing, according to a study by the Research Institute of Retail Consumer Goods (IELKA).

While in June 2015 the rate of card usage at the stores of major supermarket chains had stood at 7-8% and in smaller retail outlets below 1%, this has now soared to over 30% and 7.5% respectively. One in two consumers now say that since the government imposed the capital controls at end-June they have mostly been using cards to pay at supermarkets.

The growth in card usage translates into increased costs for supermarkets due to the high commissions they have to pay to banks. IELKA calculated that this shift in consumer habits has led to a significant rise in the retail chains’ operating expenses, by €40 million on an annual basis or equal to 0.21% of sales.

Regardless of how they pay, consumers now definitely buy less. IELKA has found that after the first week of July, when sales showed a 30% spike due to panic buying, supermarket turnover is now the lowest in recent memory, having fallen 5.1% in September from a year earlier, according to the Hellenic Statistical Authority. (Ekathimerini 30.11)

Back to Table of Contents

7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Chanukah Celebrated in Israel & the World Over

Sunday evening, 6 December, the Jewish world began the observance of the eight day Chanukah holiday. From the Hebrew word for “dedication” or “consecration”, Hanukkah marks the rededication of the Temple in Jerusalem after its desecration by the forces of Seleucid Greeks and commemorates the “miracle of the container of oil”. The re-dedication followed the liberation of Jerusalem by the Jewish forces, or Maccabees, who were fighting to regain their independence against the Greek invaders. There was only enough consecrated olive oil to fuel the eternal flame in the Temple for one day. Miraculously, the oil burned for eight days, which was the length of time it took to press, prepare and consecrate fresh olive oil. The holiday also celebrates the military victory and the restoration of Jewish independence. The holiday lasts until 5 December.

Though business is permitted during this holiday, the week in Israel is marked by many leaving work early to be with the family at nightfall, in time to light the chanukiah or menorah, an eight branched candelabra. The primary observance is to light a single light each night for eight nights. As a universally practiced “beautification” of the mitzvah, the number of lights lit is increased by one each night. There is also a custom of eating foods fried in oil as a culinary way of commemorating the Chanukah miracle after the Maccabees won the war against the Greeks, liberating Israel. While the favored fried Chanukah treat of Israelis is the jelly doughnut, most North American Jews prefer latkes, a grated potato-and-onion pancake fried in oil and served with sour cream or apple sauce.

Back to Table of Contents

7.2 More Arab Israelis Volunteered for National Service in 2015

There was a 13% increase in the number of Arab Israelis volunteering for National Service, said the Shluchot group, which works to encourage such voluntarism. Despite intimidation by Islamist elements in their towns, Shluchot said that more Arab Israeli youths were making the choice to embrace Israeli society, taking what for many is the “ultimate leap” – signing up for a government program and contributing to the state. The study covers the entirety of 2015 through mid-November.

Arab Israelis are not drafted into the IDF, unlike Jews and members of the Druze community, but may volunteer to serve in the army, with most of those coming from Bedouin communities. Otherwise, Arabs are exempt from service. For those who wish to serve the state but not serve in the army, there is the National Service. Generally taken advantage of by girls from observant families who do not wish to serve in the IDF, the Service also takes in Jewish males who for various reasons are unable to serve in the army or are not qualified to do so, as well as Israeli Arab volunteers. Individuals who serve in the corps receive rights and benefits similar to those of IDF soldiers.

Over the past decade, said Shluchot, the number of Arab volunteers recruited by the group annually has climbed from 600 to 800. Overall, the group said it expects that 4,500 will have volunteered by the end of the year, a 13% increase over last year. (Israel Hayom 26.11)

Back to Table of Contents

*REGIONAL:

7.3 Lebanon Ranked 138th on the Global Gender Gap Index 2015

According to the 2015 edition of the World Economic Forum’s Global Gender Gap Index, Lebanon ranked 138th out of 145 countries. With this rank, Lebanon earned a score of 0.598, whereby 0 represents complete gender inequality and 1 represents complete equality. Lebanon, along with Yemen, Kuwait, Oman, Qatar and Brunei, scored the lowest in terms of political empowerment, where only 3% of the gender gap has been covered. The gender gap is also very pronounced in Lebanon in the fields of economic participation and opportunity. Lebanon ranked 138 on the Labor Force Participation sub-index and on the estimated earned income sub-index. However, the gender gap is the most resorbed in Lebanon in terms of education as the country ranked first on enrolment in secondary and tertiary education. (Blom 28.11)

Back to Table of Contents

7.4 Sisi Loyalists Sweep All 60 Seats in Egypt’s Election

An electoral alliance loyal to Egyptian President Abdel Fattah Al Sisi has picked up all 60 list seats in the second and final round of a parliamentary election, one marred by low participation. “For the Love of Egypt”, a loyalist electoral alliance led by a former intelligence officer, has now swept both rounds of the elections and will enter parliament with all 120 seats allocated to winner-takes-all lists. The second phase of elections, hailed by Sisi as the climax of the military’s roadmap to democracy, were held on 22 and 23 November, with low voter turnout similar to the first phase.

Turnout in the latest round of voting, which took place in 13 provinces, including Cairo, was almost 30%. The vote is meant to restore parliament after a gap of more than three years, which critics say have been undermined by widespread repression. All but nine of the 222 individual seats contested in round two will be subject to run-offs between leading candidates. They will take place on 1 – 2 December after candidates failed to secure a majority of votes in earlier rounds.

The new parliament will contain 568 elected members — 448 elected on an individual basis and 120 through the winner-take-all lists that have all gone to loyalists. Sisi may appoint as many as 28 more lawmakers. Preliminary results are expected on 3 December and the final list of parliamentary members will be announced on 20 December. (Reuters 25.11)

Back to Table of Contents

7.5 Egypt Population to Reach 90 Million by 6 December

Egypt’s population will reach 90 million on 6 December, according to the Central Agency for Public Mobilization and Statistics (CAPMAS). In addition, the number of Egyptian expatriates, according to the Foreign Ministry, stands at about 8 million people. Egypt’s population reached 89,960,843 on 30 November.

The Cairo governorate houses the largest number of inhabitants, which now stands at 9.437 million, followed by the Giza governorate, with 7.755 million people, then Sharqiya with 6.629 million inhabitants. Daqahlia came fourth with 6.332 million people, followed by Beheira with 6.261 million people. South Sinai houses the lowest population in the country, with approximately 175,406 inhabitants, followed by the New Valley with 242,334 people and the Red Sea governorate with about 371,098 people. (CAPMAS 30.11)

Back to Table of Contents

7.6 Morocco Ranks in Bottom 10 Countries in Gender Gap Report

Morocco still has work to do in bridging the gender gap between men and women a report has found. The country ranks 139 out of 145 countries in the Global Gender Gap Report, published by the World Economic Forum (WEF) on 18 November. With a score of 0.593 out of 1, Morocco ranks in the bottom tier of countries among whom are Oman, Egypt, Lebanon, Jordan, Iran, Chad, Syria, Pakistan and last, Yemen.

The index determines rank based on four key indicators: economic participation and opportunity, educational attainment, health and survival, political empowerment. According to the data published, economic participation and educational attainment lowers Morocco’s score as health and political empowerment for women place the kingdom in the top 100 countries.

Women in Morocco are less represented in politics, in ministerial positions and parliament where women occupy about 20% of seats. Also, women generally work less than men according to the labor market figures and those who do earn less than men. (MWN 20.11)

Back to Table of Contents

8: ISRAEL LIFE SCIENCE NEWS

8.1 Teva & Heptares to Develop Novel Treatment of Migraines

Teva Pharmaceutical Industries and the UK’s Heptares Therapeutics entered into a licensing and drug-discovery agreement under which Teva will receive exclusive global rights to develop, manufacture and commercialize novel, small-molecule calcitonin gene-related peptide (CGRP) antagonists discovered by Heptares for the treatment of migraine. Under the terms of the agreement, Heptares will receive an upfront payment of $10 million, research funding, and is eligible to receive additional research, development and commercialization milestone payments of up to $400 million. In addition, Heptares will be eligible to receive royalties on net sales of products resulting from the alliance.

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. (Teva 25.11)

Back to Table of Contents

8.2 BioLineRx Trial for Treatment in Two Bone Marrow Failure Conditions

BioLineRx commenced a Phase 1/2 trial for BL-8040, in combination with standard of care immunosuppressive therapy, as a novel treatment for two bone marrow failure conditions: hypoplastic myelodysplastic syndrome (hMDS) and aplastic anemia (AA). The open-label trial, conducted in collaboration with MD Anderson Cancer Center in Houston, will examine BL-8040’s ability to improve bone marrow cellularity and peripheral blood counts in up to 25 patients suffering from these bone marrow failure conditions. The study’s primary endpoint is to evaluate the safety and tolerability of treatment with BL-8040 on top of the standard immunosuppressive regimen of Anti-Thymocyte Globulin (hATG), Cyclosporine and Methylprednisolone (steroids) in hMDS and AA patients.

Both hMDS and AA are characterized by a T cell-driven autoimmune attack on the bone marrow that results in depletion of hematopoietic precursors, leading to anemia and low white blood cell counts. In this regard, high CXCR4 expression on pathogenic T cells has been suggested to facilitate infiltration to the bone marrow. BL -8040, a CXCR4 antagonist, is expected to inhibit migration of pathogenic T cells to the bone marrow, thereby mitigating the severe depletion of hematopoietic stem and progenitor cells.

Hypoplastic myelodysplastic syndrome (hMDS) and aplastic anemia (AA) are hematological conditions caused by progressive bone marrow failure, and characterized by ineffective production of all blood cells, leading to severe anemia and cytopenias (low blood counts).

Jerusalem’s BioLineRx is a publicly-traded, clinical-stage biopharmaceutical company dedicated to identifying, in-licensing and developing promising therapeutic candidates. The Company in-licenses novel compounds primarily from academic institutions and biotech companies based in Israel, develops them through pre-clinical and/or clinical stages, and then partners with pharmaceutical companies for advanced clinical development and/or commercialization. (BioLineRx 23.11)

Back to Table of Contents

8.3 Evogene Opens R&D Facility in St. Louis, Missouri

Evogene officially opened its new Research and Development facility in St. Louis. The new facility is located at the Bio-Research and Development Growth (BRDG) Park, on the campus of The Donald Danforth Plant Science Center in St. Louis, Missouri, a world leading center for innovation in agriculture. Within its crop protection area of activities, Evogene is a leader in the integration and analysis of vast amounts of microbial genomic data, in order to identify genes that can be specifically toxic to insects and fungi that lead to substantial crop damage and losses. In its initial activities, the new St. Louis facility will support these efforts, providing data generation experiments, functional screening and validation of discovered genes in biological systems, as well as establishing transformation and validation capabilities for biotechnology soybean.

Rehovot’s Evogene is a leading company for the improvement of crop productivity and economics for the food and feed industries. The Company has strategic collaborations with world-leading agricultural companies to develop improved seed traits in relation to yield and a-biotic stress (such as tolerance to drought), and biotic stress (such as resistance to disease and nematodes), in key crops as corn, soybean, wheat and rice, and is also focused on the research and development of new products for crop protection (such as weed control). (Evogene 19.11)

Back to Table of Contents

8.4 Teva & University College London Embark on Unique Brain Imaging Study

Teva Pharmaceutical Industries and University College London (UCL) announced the start of a unique study, combining state-of-the-art brain imaging with key biomarkers, aimed at building a better understanding of the role of inflammation in neurodegenerative disease and potentially a new approach in its early diagnosis and treatment. The Pilot Longitudinal Study in Alzheimer’s Disease of Central Markers of Microglial Activation (PADMMA) study is a two-year study in 20 patients that will assess, using PET imaging, the prevalence and pattern of activation of a specific type of cell, called microglia, in the central nervous system (CNS) in people with certain symptoms of neurodegenerative disease. It is key demonstration of Teva’s commitment towards dementia research made following the UK Government’s Dementia Summit, spearheaded by UK Prime Minister Cameron.

This unique study is the result of an extensive collaborative effort supported by the UK Israel Tech Hub at the British Embassy in Israel – helping Teva, UCL and Imanova, come together in an effort to change the paradigm in neurodegenerative disease. (Teva 19.11)

Back to Table of Contents

8.5 Dell Selects Zebra to Bring Learning Insights to Hospitals Worldwide

Zebra Medical Vision signed a multi-year agreement with Dell Services to deliver its Clinical Research and Analytics platforms to providers and researchers globally. Zebra’s platforms will now be offered to any clinical site, including more than 1,000 Dell Unified Cloud Archive (UCA) customers. Through automated health insights, machine learning and decision support tools, Zebra’s platforms have the potential to transform patient care, reduce healthcare costs and drive clinical insights.

Using Zebra’s analytics platform, Dell will now offer any clinical site access to algorithms that provide screening and diagnostic decision support, assist in creating disease based risk profiles, and help accurately identify patients eligible for preventive care and wellness programs. Enabling care providers with this type of information can identify of patients at risk for osteoporosis, cardiac disease, liver disease or others pathologies, which can be treated more effectively when discovered early. Integrated care providers, HMOs, ACOs and organizations seeking to manage risk or build preventative care programs have the potential to significantly improve their operations and level of care.

From research to reality and commercialization, Zebra Medical Vision uses big data to deliver large scale clinical research platforms and next generation imaging analytics services to the healthcare industry. Its Imaging Analytics allow healthcare institutions to identify patients at risk of disease, and offer improved, preventative treatment pathways to improve patient care. The Zebra Research Platform provides researchers the largest structured clinical data set globally, and makes it available for research, including a complete development, hosting, storage and computing environment, and follow-on regulatory and commercialization services. Headquartered in Kibbutz Shefayim, Israel, the Company was founded in 2014. (Zebra Medical 24.11)

Back to Table of Contents

8.6 Teva & Takeda to Meet Needs of Generic Medicine Use in Japan

Teva Pharmaceutical Industries and Takeda Pharmaceutical Company announced that the two companies have entered into a definitive agreement to establish an unprecedented partnership in Japan. The strategic move between Takeda, an R&D driven pharmaceutical company which has a long history as a leading company in Japan, and Teva, among the top ten pharmaceutical companies in the world and the global leader in generics, will form a new business venture to meet the wide-ranging needs of patients and growing importance of generics in Japan. As one of the fastest growing generics markets in the world, Japan is expected to continue its high growth driven by social requirements such as increased patients’ needs for stable supply of affordable high quality medicines and the Japanese government’s policy of reduction of healthcare expenditures. Takeda’s leading brand reputation and strong distribution presence in Japan combined with Teva’s expertise in supply chain, operational network, global commercial deployment and infrastructure, and R&D, brings forward a new, collaborative business model in line with government objectives and ultimately serving millions of patients.

Back to Table of Contents

8.7 Exablate Neuro System Approved by Korea’s Drug Safety Ministry

Elbit Imaging was informed by Tirat HaCarmel’s InSightec that the Korean Ministry of Food and Drug Safety (MFDS) has approved its Exablate Neuro system to treat movement, pain and behavioral disorders. Insightec’s Exablate Neuro platform is transforming medicine by presenting a non-invasive treatment alternative that combines two technologies: Focused Ultrasound, which is used to lesion the targeted tissue deep in the brain, and Magnetic Resonance Imaging (MRI), which is used to guide the ultrasound waves to the specific target tissue and provide real-time feedback on treatment progress and outcome. The result of the above integration is a breakthrough therapy platform that enables outpatient procedures.

This regulatory approval allows Korean patients suffering from neurological disorders which cause significant disability access to a new, non-invasive treatment option that does not require open surgery. Previous treatment options for patients who do not respond to drugs include deep brain stimulation, radiofrequency ablation and radiosurgery which are highly invasive and/or involve risks such as ionizing radiation, infection, bleeding and collateral brain tissue damage.

The Company holds approximately 89.9% of the share capital of Elbit Medical Technologies which, in turn, holds approximately 29.6% of the share capital in InSightec (on a fully diluted basis). (Elbit Imaging 30.11)

Back to Table of Contents

8.8 BrainStorm Awarded Additional $735,000 Grant for 2015 from Israel’s OCS

BrainStorm Cell Therapeutics announced that its wholly-owned subsidiary, Brainstorm Cell Therapeutics Ltd., has been awarded an additional grant of approximately $735,000 from Israel’s Office of the Chief Scientist (OCS). This grant, the second this year, brings the total awarded by OCS to Brainstorm for 2015 activities to approximately $1.8 million. This is the eighth year that BrainStorm has received grant support from the Office of the Chief Scientist, which is part of the Ministry of Economy Program to support innovative technologies in Israel. The funds will support the development NurOwn, BrainStorm’s innovative mesenchymal stem cell-based platform for treating neurodegenerative diseases. NurOwn is currently being investigated in a Phase 2 clinical program in amyotrophic lateral sclerosis (ALS).

Petah Tikva’s BrainStorm Cell Therapeutics is a biotechnology company engaged in the development of first-of-its-kind adult stem cell therapies derived from autologous bone marrow cells for the treatment of neurodegenerative diseases. The Company holds the rights to develop and commercialize its NurOwn technology through an exclusive, worldwide licensing agreement with Ramot, the technology transfer company of Tel Aviv University. (BrainStorm 30.11)

Back to Table of Contents

8.9 BrainStorm & Octane Success in Cocoon Application Development

BrainStorm Cell Therapeutics and Octane Biotech, a Canadian company that focuses on clinical systems for cell and tissue therapy, have made significant progress toward the development of a novel bioreactor for industrial-scale manufacture of BrainStorm’s NurOwn neurotrophic-factor secreting mesenchymal stem cells. The companies have completed key development activities related to the customization of specific features of Octane’s Cocoon instrumentation platform to enable efficient delivery of BrainStorm’s NurOwn stem cell therapy. The collaborative program has generated a NurOwn therapy-specific cassette that is employed as a disposable cartridge within the standard Cocoon platform, along with a dedicated software program to deliver and track the NurOwn process. The project is supported by a grant awarded by the Canada-Israel Industrial Research and Development Foundation (CIIRDF).

With the Cocoon system available as a routine evaluation platform, the teams at BrainStorm and Octane are now working to further refine development of the cassettes that will be used in the automated bioreactors to manufacture NurOwn stem cells.

Back to Table of Contents

8.10 Galmed Gets FDA Clearance of IND of Aramachol for Treatment

Galmed Pharmaceuticals announced that the U.S. FDA has cleared Galmed’s Investigational New Drug (IND) application for the ARRIVE Study (ARamchol for the Reversal of HIV-AssociatEd Lipodystrophy and NAFLD), a proof-of-concept clinical trial that will evaluate the safety and efficacy of Aramachol in up to 50 patients with HIV-associated lipodystrophy and nonalcoholic fatty liver disease, or NAFLD.

Tel Aviv’s Galmed is a clinical-stage biopharmaceutical company focused on the development of a novel, once-daily, oral therapy for the treatment of liver diseases utilizing its proprietary first-in-class family of synthetic fatty-acid/bile-acid conjugates, or FABACs. Galmed believes that its product candidate, Aramchol, has the potential to be a disease modifying treatment for fatty liver disorders, including NASH, which is a chronic disease that Galmed believes constitutes a large unmet medical need, and HIV-associated lipodystrophy and NAFLD. (Galmed 01.12)

Back to Table of Contents

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Meizu to Integrate Lucid’s Technology in Its Smartphones

China’s Meizu and Lucidlogix (Lucid) announced the licensing of PowerXtend, the De-facto standard in power-saving software for Meizu’s innovative and user-friendly smartphones. PowerXtend lengthens the device daily battery life by up to 20% when using applications such as instant messaging, multimedia browsing, gaming and navigation. Integrated into the Flyme OS smart power-saving mode, PowerXtend maximizes the device user-experience by combining increased mobility and a great multimedia experience.

As a premium mobile device manufacturer, Meizu’s designers focus on combining performance, ease of use and functionality, emphasizing the satisfaction of their enthusiast customers throughout the day. Meizu’s latest generation devices are loaded with innovative technologies to provide the highest user experience while maintaining mobility and providing extended time between device charges. With the integration of PowerXtend, Meizu users enjoy improved mobility and increased productivity, with fewer stops at the charging station.

Netanya’s Lucidlogix Technologies provides software core for power saving solutions, satisfying the growing demand for performance and mobility. Benefiting from Lucid’s core graphics technologies, Lucid’s proprietary algorithms and software solutions dramatically improves mobile performance for Android devices. (LucidLogix 23.11)

Back to Table of Contents

9.2 Celeno & Altech Team to Provide High-End Wireless Capabilities

Celeno Communications announced that South Africa’s Altech UEC, a leading developer of digital technology for the converged African broadcast and broadband Industries, will deliver a range of high-end 802.11ac wireless capabilities to HD gateways as well as satellite, cable and IP set-top boxes. Celeno’s video-grade Wi-Fi chips will power Altech’s gateways and set-top boxes, enabling Altech to offer whole-home Wi-Fi networking that delivers reliable throughput and the high quality of service (QoS) required for data and HD video distribution across the home to multiple portable devices.

Ra’anana’s Celeno provides high performance Wi-Fi chips and software for demanding home networking applications. Celeno’s extensive chip portfolio and OptimizAIR technology enable the wireless distribution of multiple and simultaneous HD video and data streams throughout the home with the highest levels of performance and reliability while ensuring a superlative quality of service and user experience. (Celeno 19.11)

Back to Table of Contents

9.3 Sckipio Named “GSA Start-Up to Watch” Award Nominee

Ramat Gan’s Sckipio Technologies announced that the Global Semiconductor Alliance (GSA) has nominated Sckipio for its prestigious “Start-Up to Watch” award. According to the GSA, Sckipio was nominated because of its, “potential to positively change the market, or the semiconductor industry in general, through the innovative use of semiconductor technology or a new application for semiconductor technology.”

Sckipio is the leading innovator in the G.fast, the new ultra-fast broadband access technology, which fundamentally changes how telecom service providers can affordably deliver 1Gbps Internet access to bandwidth-hungry customers. Sckipio was the first company to introduced a G.fast modem chipsets. Sckipio was also the first to demonstrate 16-port and 32-port Distribution Point Units, the first to run UHDTV content across G.fast, the first to demonstrate SDN running over G.fast (in partnership with AT&T), and the first to deliver 1Gbps at 300 meters – changing the dynamics of the broadband access market.

Sckipio was selected by GSA’s Private Awards Committee, which is comprised of members of the Emerging Company CEO Council, venture capitalists and select serial entrepreneurs in the industry. In addition, the company recently was named Best Fixed Broadband Access Solution at the Broadband World Forum in October. (Sckipio 18.11)

Back to Table of Contents

9.4 SQream Technologies Named a 2015 Red Herring Top 100 Global Winner

SQream Technologies has been included in the Red Herring Global 100 list in recognition of the world’s leading private technology companies. Red Herring’s Top 100 Global list has become a mark of distinction for identifying promising new companies and entrepreneurs. Red Herring’s editorial staff evaluated the companies on both quantitative and qualitative criteria, such as financial performance, technology innovation, management quality, strategy, and market penetration. This assessment of potential is complemented by a review of the track records and standing of startups relative to their peers, allowing Red Herring to see past the “buzz” and make the list a valuable instrument of discovery and advocacy for the most promising new business models from around the world.

Tel Aviv’s SQream introduces the first patent-pending award-winning technology that boosts analytics performance through massive parallel computing, using a GPU-based technology (Graphic Processing Unit). The revolutionary technology delivers up to 100 times faster big data analytics than any other key market player, with scalability capabilities surpassing existing database analytics by orders of magnitude – representing a new era for the Telecom, Genome, Cyber, Finance and IoT industries. (SQream Technologies 25.11)

Back to Table of Contents

9.5 Cameyo Provides Windows Legacy Applications Migration Solution

Cameyo is an application virtualization solution for Windows. It allows packaging entire Windows applications into a single executable which can be used on any machine without installation (offline) or within the browser (online). It is often used by IT and internal development departments for distributing internally-developed applications within an organization. Cameyo is also used for Windows XP & 2003 migration and application remediation. Applications designed for these older platforms often do not function properly on recent Windows versions and their adaptation requires extensive development efforts and cost. Cameyo remediates Windows XP and Windows 2003 Server applications by wrapping them into a bubble that abstracts the OS layer.

Tel Aviv’s Cameyo is a popular application virtualization tool for Windows. It allows running applications on any Windows machine, or any device: Mac, Android, iOS, Chromebook. It provides simple, easy to grasp application virtualization with a short learning curve. Cameyo offers simple, yet powerful options for virtual applications: ranging from virtualization modes to expiration features to real-time data encryption. (Cameyo 30.11)

Back to Table of Contents

9.6 Korea Telecom Taps Altair for Ultra-Low Power LTE Connectivity of Smart Meter

Hod HaSharon’s Altair Semiconductor, a leading provider of LTE chipsets, announced its FourGee-1160 Category 1 (CAT-1) chipset has been selected by Korea Telecom (KT) to provide ultra-low power LTE connectivity for three Internet of Things (IoT) use cases on exhibit at the “KT Internet of Small Things” Event in Korea. Altair’s FourGee-1160 is the first chipset designed and optimized exclusively for LTE CAT-1 operation. It features ultra-low power consumption, support for a variety of typical host/peripheral interfaces, an embedded power management unit and a flexible application layer with hardware based security. The chipset has been adopted by numerous M2M/IoT module and device makers and is expected to ship commercially by the end of this year.

One unique feature of Altair’s Four-Gee-1160 CAT-1 chipset is Power-Save Mode (PSM), which enables terminals to enter a deep-sleep mode for long periods of time after notifying the base station. This reduces significantly the amount of power associated with frequent communication requests normally sent by the base station. PSM is a crucial element of many IoT/M2M applications, including smart metering, smart city and telematics. (Altair Semiconductor 30.11)

Back to Table of Contents

9.7 Optimal+ & Freescale to Improve Manufacturing Equipment Utilization

Optimal+ was selected by Freescale Semiconductor to deliver their enterprise software suite to enhance the efficiency of their global manufacturing operations. In a move intended to improve the utilization of Freescale’s manufacturing equipment worldwide, the two companies signed a multi-year agreement under which they will collaborate to also improve processes at Freescale’s internal and external manufacturing facilities.

Holon’s Optimal+ delivers the industry’s first proven enterprise solution that builds manufacturing intelligence that measurably improves semiconductor product yield, throughput and quality through early detection. The company’s solutions enable a paradigm shift in the manufacturing data infrastructure of semiconductor companies to provide rapid, actionable intelligence that can be used to optimize every measurable link in their global supply chain. (Optimal+ 30.11)

Back to Table of Contents

9.8 Silicom New Coleto Creek Design Wins from Cyber Security Leaders

Silicom announced that two of its Cyber Security customers, both recognized industry leaders, have awarded Silicom new Design Wins for its Quick Assist Technology (QAT)-optimized, Coleto Creek-based, encryption hardware accelerators and other networking solutions. These offerings include proprietary software that make it easier for customers to use the adapters at best advantage. Both customers have placed initial purchase orders, and total sales from the Design Wins are projected to ramp up to approximately $2 million per year. In parallel, the Company continues to work with these customers towards additional wins with other Silicom products.

Kfar Saba’s Silicom is an industry-leading provider of high-performance networking and data infrastructure solutions. Designed primarily to increase data center efficiency, Silicom’s solutions dramatically improve the performance and availability of networking appliances and other server-based systems. (Silicom 01.12)

Back to Table of Contents

10: ISRAEL ECONOMIC STATISTICS

10.1 Israel Food Exports to North America Headed to $340 Million for 2015

Israel’s food exports to North America are headed to a record $340 million, if the numbers for the first half of 2015 hold up. According to the Israel Export Institute, Israel exported $135 million of processed food and beverages, a growth of 5% from first half in 2014. Exports of fresh fruits and vegetables reached $33million, a growth of 13.6% from first half in 2014. 30% of the total food and beverages exports were to North America. One reason for the extraordinary growth is that many kosher companies are now importing many items under private label. (KT 01.12)

Back to Table of Contents

10.2 OECD Lauds High Education Rates Among Israelis

Israel has one of the highest-educated populations of any country in the developed world, according to the Organization for Economic Cooperation and Development’s latest “Education at a Glance 2015” report. It found that 85% of Israelis aged 25 – 64 have completed upper secondary education, compared with the OECD average of 76%. Some 49% of Israelis in that age group went on to tertiary education (universities or colleges), compared with the OECD average of 34% – the second-highest rate of any OECD country. Israel also had a low high school dropout rate of 14.6%, compared with the OECD average of 24.7%.

The report said Israel was one of only a handful of countries to increase its investment in education even during the global financial crisis, devoting 6.5% of its GDP to its education system. Nevertheless, “Israel still spends less per student for all services, across all education levels, than the OECD average,” the report said.

However, teaching conditions in Israel were found to be lacking: Teachers in Israel work longer hours, in larger classes, for smaller wages than the OECD average. The report also found that Israeli students are significantly weaker in mathematics, reading, and science compared to their OECD counterparts. (OECD 24.11)

Back to Table of Contents

10.3 Cancer is the Leading Cause of Death for Israelis

Cancer is the leading cause of death in Israel, claiming 10,698 lives — 25.8% of all deaths — in 2013, according to the Central Bureau of Statistics. According to the figures, the deadliest types of cancer for men were lung, large intestine and pancreatic cancers, and for women were breast, large intestine and lung cancers.

In 2013, 41,479 Israelis passed away, 0.5% of the total population. Just over half of the deaths, 50.6%, were female. Some 80% were over the age of 65 and 6% were under 45, with 1.3% (549 cases) being babies less than a year old. After cancer, the leading causes of death were heart-related diseases (15.1% of deaths), strokes (5.6%), diabetes (5.6%), respiratory diseases (5.4%), external causes such as accidents, murders and suicides (4.2%), and kidney diseases (3.7%).

The Israeli mortality rate from diabetes, infectious diseases and kidney diseases is especially high compared with other OECD countries, while the mortality rate from cancer, strokes and heart diseases is relatively low.

For Israeli women, the mortality rates from breast cancer and diabetes are among the highest in the OECD, with 37.7 deaths from diabetes per 100,000 population. Only Turkey (44 per 100,000) and Mexico (139 per 100,000) have higher mortality rates. Additionally, the mortality rate from diabetes and kidney disease for Israelis has soared five- to seven-fold since the 1970s, but the mortality rate from heart diseases and strokes has fallen by more than 80%. The mortality rate from suicides is four times higher for men than for women, while the death rate from car accidents is 3.8 times higher for men, and from murders is 2.8 times higher for men than for women. (CBS26.11)

Back to Table of Contents

11: IN DEPTH

11.1 ISRAEL: Cyber Monday? Israeli Cyber Tech from Cluster to Class

On 30 November, the IVC Research Center reported that it’s been quite a month for Israeli cyber tech companies. Despite talks in Europe and elsewhere of boycotting Israeli products and companies, there’s a surge of interest in Israeli cyber technologies. With the world more acutely aware of cyber threats and the role of technologies in the war against terrorism following the recent attacks in Paris and the threats in Belgium, Israel’s cyber experience and advantage catches center stage.

Like many Israeli technologies, this is a cluster born of need and hard earned experience, it’s an advantage edged in unfortunate circumstances, but the implications on the local tech industry and the world’s security are undeniable.

The reality that now dawns on Europe and the rest of the world is one that Israel has been facing – sadly – on a daily basis since the day of its rebirth. But while threats, security and survival are needs that lead to the obvious Israeli prowess in homeland security and military technologies, they also lead to a plethora of technologies, products and services that concern not just governments, but literally almost every company and organization in the world.

The famous Sony hack last year raised flags for most enterprises where cloud servers are used, where the workforce is large and globally dispersed, where the IT systems are large or complex and where the data on said IT systems holds strategic importance such as commercial secrets, IP, work products, etc. That’s basically every multinational corporation, but more and more – almost every company, period. Your business data, e-mail exchange and organizational knowledge are all strategically important, most organizations today use cloud servers or global networks to some extent, and even small companies today may have employees working from different geographic locations – even if it’s just your marketing manager who checks e-mail on his mobile device while at home, or your CEO connecting to her office workstation while away on the road.

We recently checked the status of the cyber tech cluster in Israel and found nearly 600 Israeli high-tech companies, as well 60 foreign R&D centers, currently operating in Israel focused on cyber technologies. While some are definitely providing military or government-specific technologies, the large majority of companies are offering technologies that are relevant to anyone from enterprises, NGOs, SMBs all the way down to individual users. Most companies are private, though we did find 29 public companies in the cluster. A majority of companies (59%) were generating revenues, with 18% of companies generating above $10 million in revenues, annually.

Israeli Cyber Tech Companies by Stage (%)

The cluster is rapidly growing, with entrepreneurs coming directly from IDF cyber units as well as forming a ‘second generation’ of graduates from other cyber security organizations and companies that are operating not only in the military or government level. The security community, regardless of the entrepreneur’s original background and experience, thus generated an average of 70 new cyber startups formed annually, with the rate rapidly climbing.

The growing, successful cluster also generates plenty of investment opportunities and investors are flocking in. We see a clear increase in both the number of companies closing financing rounds, as well as the average financing round as of 2012. The first half of 2015 stood at an average of $7.4 million per financing round, a 34% increase from the 2014 average. We believe that by the end of 2015 nearly $200 million more will have been raised by Israeli cyber tech companies, and we believe the uptrend will continue well into 2016, powered by the current world interest in everything cyber. (IVC 30.11)

Back to Table of Contents

11.2 OMAN: Long-Term Rating Lowered To ‘BBB+’; Outlook Negative

On 20 November, Standard & Poor’s Ratings Services lowered its long-term local and foreign currency sovereign credit ratings on the Sultanate of Oman to ‘BBB+’ from ‘A-‘. The outlook is negative. We affirmed the short-term ratings at ‘A-2’.

At the same time, we revised our transfer and convertibility (T&C) assessment on Oman to ‘A-‘ from ‘A’.

Rationale

We project a sharp increase in Oman’s general government and current account deficits over 2015-2018, and we expect that trend growth in real per capita GDP will remain materially below that of peers. These factors were included in the downside scenario of our previous review and we have therefore lowered our long-term ratings on Oman to ‘BBB+’.

Since our review in May, we have lowered our Brent oil price assumptions to average $63 per barrel (/bbl) in 2016-2018 from $72/bbl (Omani crude typically trades at a discount to Brent of about $5). This shift in our assumptions alongside the much weaker-than-expected fiscal and external data outturns over the first half of 2015, have led us to materially revise our key credit metrics for Oman for 2015-2018.

Oman posted a budget deficit of Omani rial (OMR) 2.68 billion ($7 billion) during the first eight months of 2015 (about 16% of GDP estimated over the same period), compared with an OMR205.7 million surplus (about 1% of GDP) reported for the same period a year earlier. In the first eight months of this year, government revenues fell by 36% compared with a year ago, as oil proceeds declined by 46%. Oman’s government increased oil output to a record high of 992,700 barrels per day in June, but this spike failed to effectively mitigate the negative ramifications from lower oil prices. Budget expenditures declined by 3.2% over January-August 2015 compared with the same period in 2014 because the government cut its hydrocarbon-related investment and military spending. These results are much worse than we had expected, and we now forecast a general government deficit of about 15% of GDP in 2015. Our general government balance forecasts include an estimate of the government investment returns.

We think that the government has limited room for spending cuts, given that nearly 50% of spending relates to public-sector wages and subsidies and exemptions, which are typically difficult to reduce. We expect some cuts to outlays on subsidies, as well as the postponement of some defense spending and lower-priority capital expenditures in the 2016 budget. We understand that the 2016 budget will be based on an oil price assumption of $55/bbl compared with $75/bbl in 2015. The Omani government has committed to increasing non-hydrocarbon-related tax revenues over the medium term.

As a result, we expect the general government deficit to average nearly 12% of GDP in 2015-2018. We assume that deficit financing will result in an annual average increase in Oman’s government debt of some 3% of GDP a year over 2015-2018. We also estimate that the government’s net asset position will fall from 59% of GDP in 2015 to 19% in 2018.

Sizable oil receipts in past years have helped maintain Oman’s strong external position. However, lower oil prices lead us to forecast a current account deficit in 2015 of nearly 14% of GDP, compared with the 5% of GDP deficit we forecast in May 2015, as the current account deficit in the first half of the year already exceeds our full year forecast from May. We expect the current account deficit to remain in double digits until 2018.

Nevertheless, Oman’s external position – as measured by liquid external assets minus external debt – will remain a rating strength. However, we expect it will decline sharply, to a small debtor position of 4% of current account receipts (CARs) in 2018 from a creditor position of about 56% in 2015. Meanwhile, we expect the country’s gross external financing requirements will rise to 123% of CARs and usable reserves in 2018 from 115% in 2015. In addition to higher external borrowing, we assume net inflows of foreign direct investment (FDI) will pick up to the equivalent of 1% of GDP, which will help finance major projects such as the Duqm port and petrochemicals complex as well as the Khazzan gas project.

In Oman, the hydrocarbon sector accounted for just under half of GDP in 2014, slightly over half of exports, and three-quarters of government revenues. However, we note that this sector’s contribution to the economy fell to about 35% of GDP over the first half of 2015 following the pronounced decline in oil prices. We now forecast annual average real GDP growth of 2.6% a year in 2015-2018, chiefly based on a still-positive contribution to growth from net exports in 2015 and 2016 and a recovery in domestic consumption thereafter. We estimate trend growth in real GDP per capita at negative 1%, which is below peers. We expect slow progress on the government’s Omanization program – a training program for Omani citizens aimed at easing dependency on foreign labor – due to a skills mismatch between many Omani workers and the private sector, and the more attractive pay and conditions that Omanis enjoy working in the public sector. We note that as of August 2015 expatriate workers in the private sector (1,578,937) had increased by 4.5%, while the amount of Omanis in the private sector (207,228) increased by 0.4%. We anticipate that lower oil prices will turn the GDP deflator markedly negative in 2015. We therefore expect per capita GDP will drop below $16,000 in 2015 from an estimated $20,500 in 2014, before recovering slowly to about $18,000 in 2018.

Under the rule of Sultan Qaboos bin Said Al Said, the country has undergone a remarkable improvement in human development. 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 the sultan’s reign, we think it also results from 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. Although we expect the succession process will be smooth, without any radical policy shifts, 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 anticipate that 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 negative outlook reflects our view that the government’s fiscal and external positions could deteriorate beyond our current expectations over the next two years. Consequently, we could assess Oman as having insufficient fiscal and external strength to offset the concentration of its economy in the hydrocarbons sector and the resulting volatility.

We could revise the outlook to stable if our current forecasts for Oman’s fiscal and external positions prove to be overly conservative, perhaps if it transpires that our oil price forecasts were too low. (S&P 20.11)

Back to Table of Contents

11.3 EGYPT: As The Economy Falters, Egypt’s Police Launch a ‘War On Prices’

Emir Nader posted in Al-Monitor on 22 November that on 1 November, as Egypt’s economy was moving into choppier waters, President Abdel Fattah al-Sisi raised the issue of rapidly inflating prices in a televised public address. Promising quick action, Sisi pledged to “all needy people that, God willing, by the end of this month [November], the state will have lowered prices.”

According to the Egyptian Center for Economic Studies, Egyptians spend 40% of their income on food on average, and the country is widely known to be the world’s largest importer of wheat, in an economy heavily dependent on foreign production.

With the value of the Egyptian pound falling 11% since January, Egyptians have had to cough up more for foreign goods, and the market has reacted. Increasing food prices have been a key element driving annual inflation on the price of urban consumer goods up to 9.7% in October.

What’s more, the government says it is set to lose $280 million a month from lost tourist revenues in the fallout from the deadly crash of a plane of Russian passengers in October.

Despite the strong international influences on Egypt’s economic malaise, a branch of the Ministry of Interior took up the president’s call to quick action and has begun to exert influence on the economy and consumer prices.

The Ministry of Interior’s General Directorate for Supply and Internal Trade, also known as the supply police, has been focusing on criminal business behavior, such as traders distributing meat unfit for public consumption, but now it has turned its focus to the “greedy merchants” behind price increases.

On 4 November, the Ministry of Interior announced that the supply police (shortat tamween) had conducted meetings across Egypt with representatives of the meat, poultry and fruit and vegetable businesses and came to the agreement that they would reduce their prices on certain goods by 10%. Among them were seven of Cairo’s leading food suppliers and supermarkets. The meetings are referred to as part of the Ministry of Interior’s plan to “control markets and reduce high prices on strategic goods … to face the phenomenon of high prices and the greed of merchants.”

On 7 November, under the headline, “The Ministry of Interior continues its war on high prices,” the pro-government private newspaper Youm7 published one of many ministry press releases on the subject. It told of a meeting wherein the head of the supply police, Maj. Gen. Mahmoud al-Asheiry, encouraged numerous senior traders to reduce their prices as to “ease the burden on citizens.” They reportedly responded by agreeing to drop the price of key food items by 35%.

Attempts to find out which businesses were involved in these meetings and their motivations for agreeing to the demands were unfruitful, with Ayman Helmy, head of the ministry’s media office, referring Al-Monitor to a promotional campaign by supermarket Spinneys. Helmy said that due to the ministry’s efforts, there has been an 8% reduction in prices observed in the first two weeks of November, though Helmy did not identify where specifically in Egypt.

However, besides meeting with large businesses, the supply police’s campaign has targeted the alleged criminal behavior of individuals in local markets and production chains as a tool intended to fight the inflation on goods prices.

Briefings of the supply police’s activities across Egypt’s governorates during the first two weeks of November were reviewed by Al-Monitor. In them, the Ministry of Interior lists dozens of cases brought against various people within local production chains for pricing-related issues.

In the northeast governorate of Matrouh, the ministry reported regular field trips by the governor and supply police to markets and factories to check whether prices are fixed. They identified 46 crimes of “increased prices” and “selling without clear prices.” In the northern governorates of Ismailia and Gharbeya, there were 25 and 24 charges against vendors on the same grounds, respectively.

In Ismailia, police reported five cases where merchants agreed with police to keep their prices “low and fair.” In the Nile Delta’s Qalubiya, two sellers were charged for selling their produce at prices higher than what was “previously agreed upon.”

The Ministry of Supply and Internal Trade has undertaken its own responses, including distributing food to 4,000 outlets to be sold at 20% below market value. “Prices are high because the price of the dollar has increased. There are also too many intermediary roles within supply chains,” Diab said. “We are hoping to reduce prices by 30% by reducing the number of intermediary traders in the supply chain and building suitable logistics facilities.”

Sameh Zaki, assistant chairman of the Board of Cairo Chamber of Commerce, told Al-Monitor that it is unfair to put the blame on businessmen and merchants for rising food prices, and it is equally unfair to make them carry the burden of lowered food prices. “Many of our problems are based on imports, but speaking about the internal economy, we have to look at the complex supply chain from the beginning: the many intermediary traders and waste,” Zaki said.

The Ministry of Interior’s campaign appears to bear the hallmarks of similar operations in recent weeks that have individualized and criminalized wider failures in the country’s infrastructure and economy. In late October, less than a week after Egypt’s falling foreign currency reserves forced it to devalue its pound against the dollar, prominent Muslim Brotherhood businessman Hassan Malek was arrested on accusations he was harming the economy through amassing vast amounts of foreign currency and smuggling it out of the country. The ministry said Malek was arrested after they received information that he was planning to “destabilize the price of the US dollar” in Egypt.

Then when severe flooding paralyzed Alexandria, Egypt’s second-largest city, and exposed poor planning and infrastructure, seven alleged Muslim Brotherhood members were arrested on accusations they blocked drainage infrastructure with cement, despite their responsibility being widely disputed among civil society organizations.

As local press cheers on the supply police’s continuing activities with headlines such as “Government intensifies its campaign against the greed of merchants” in the private Al-Masry Al-Youm newspaper, for Zaki the understanding of the way the economy works needs to be refigured. “Blaming greedy merchants is an easy target for the media,” he said. “Perhaps these campaigns [of the supply police] are just for public consumption because they will not have an effect on food prices nationally.” (Al-Monitor 22.11)

Back to Table of Contents

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

Fortnightly, 2 December 2015

Fortnightly, 2 December 2015

Leave a Reply Cancel reply