Fortnightly, 30 November 2016

After long months of discussions, the Ministry of Health “Committee for Regulation to Promote Healthy Nutrition” submitted its food labelling recommendations on 21 November. According to the recommendations, food manufacturers will be required to mark food products containing high level of sugar, salt or fat with a warning label. The label will be red, in order to make the warning clear. These recommendations will be implemented in three stages, with increasingly stringent regulations concerning the level of ingredients requiring labeling at each stage. The first stage will start in January 2018, the second stage 18 months later, in July 2019, while the last stage will come into effect in December 2020. Food manufacturers will also be obliged to state the number of spoons of sugar in each food product and the will be prohibited from advertising products marked as unhealthy to children.

Although the committee discussed recommendations to impose regulations on fast food restaurants, including recommendations to obligate fast food chains to list the number of spoons of sugar on beverages, the final report does not include such recommendations. (Globes 21.11)

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1.2 Histadrut & Finance Ministry Reach Long-Term Care Agreement

A meeting between Histadrut (General Federation of Labor in Israel) chairman Nissenkorn and senior Ministry of Finance officials headed by Deputy Finance Minister Cohen ended on 22 November in understandings that will allow the removal of the threatened general strike. The understandings are based on three main components. The first is an initial agreement in principle that will allow implementation of a long-term collective care agreement (for a person’s lifetime). The second component is a commitment by the State to form overall policies for the issue of nursing care insurance (for the three levels of care available today for care coverage national insurance, health funds and private insurance).

One of the main ideas proposed in this context by the Minister of Health Litzman is to increase health tax by an overall NIS 2 billion annually so that the State can finance care insurance for all its citizens – instead of private insurance. The third component agreed upon in the latest arrangements includes temporary insurance, which will be extended for an additional year in order to avoid a situation in which temporary insurance expires without an appropriate alternative providing care insurance for workers without coverage. (Globes 23.11)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 Israel Eases Cyber Sales Restrictions

After liberalizing earlier this year its export control policy on dual-use, cyber-related products and services, the Israeli government is now reaching out to select military end users in a concerted push to surge cybersecurity sales. The director of the Defense Ministry’s Export and International Cooperation Directorate (SIBAT) told an international conference in Tel Aviv that his organization has declared 2017 “Israel’s year of cybersecurity exports” and, as such, is targeting more than 20 countries for enhanced cyber-related trade.

According to Israel’s National Cyber Directorate (NCD), cyber-related exports in 2015 amounted to about $4 billion, about $800 million above year-end 2014 figures and more than all other nations combined apart from the US. Estimated Israeli cyber exports for 2016 are expected to reach the $5 billion mark. These figures include all cyber-related exports, from commercial off-the-shelf and dual-use capabilities through sensitive military-end use products, services and technologies. (MoD 15.11)

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2.2 German VC Fund to Invest €20 Million in Israeli Companies

Venture capital fund r24, controlled by the German accelerator rent24, is expected to invest €20 million (NIS 80 million) in Israeli startups. Rent24 operates co-working and co-living spaces. In addition to its regular activity, rent24 also operates a startup accelerator which will enable Israeli companies to gain exposure to the European, and specifically German, technology ecosystem. The accelerator will offer companies financing of €50,000 – €2 million and further support, to include networking, advertising and more. The accelerator’s investments will be made in exchange for shares. Rent24 does not focus on a specific field – the company intends to scout for companies that are at relatively early stages.

The companies awarded financing will not be required to transfer operations to Germany, but could relocate to Berlin for a limited period. The first cycle of the accelerator is expected to include 30 companies, which will be supported for three months-a year. (Globes 16.11)

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2.3 Israeli Supermarket Chain Osher Ad Opens New York Store

Israeli supermarket chain Osher Ad opened its first branch in New York in mid-November. The Brooklyn store, named Bingo, represents a $9 million investment by the company and a U.S.-based partner. Founded in 2009, Osher Ad is Israel’s fourth-largest supermarket chain, numbering 15 stores. The store was opened in Brooklyn because of its large Jewish population and high demand for kosher foods. With 45,000 households to potentially cater to, the store could generate annual revenue of some $100 million. Should the store prove successful, the chain plans to open additional stores in cities with large Jewish communities. (Various 24.11)

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2.4 Paz Signs $700 Million Leviathan Gas Deal

Paz Oil Company announced that its subsidiary Paz Ashdod Oil Refinery had signed a natural gas supply agreement with the Leviathan partners. Under the terms of the agreement, the Leviathan partners will supply Paz Ashdod Oil Refinery with 3.12 billion cubic meters (BCM) of natural gas over a maximum period of 15 years or until the Paz unit will end its need for quantities of gas.

Paz estimates that the overall value of the agreement will amount to $700 million, on the assumption that Paz Ashdod Oil Refinery will need the amount of gas stipulated in the “take or pay” contract. The contract reflects a price of $6.20 per thermal unit. The company makes clear, however, that the financial value will effectively derive from a range of factors including the amount of natural gas that it will actually buy, the price of a barrel of Brent crude oil, and electricity production tariffs.

Paz Ashdod Oil Refinery is engaged in producing oil refining products and producing electricity for both its own use and selling to external customers. (Globes 24.11)

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2.5 Elbit’s U.S. Subsidiary Receives $103 Million U.S. Army ID/IQ Mortar Weapon Systems Contract

Elbit Systems announced that its U.S. subsidiary, Elbit Systems of America, LLC was awarded an Indefinite Delivery/Indefinite Quantity (‘ID/IQ’) contract for the production of mortar weapon systems. The contract, with a maximum value of up to approximately $103 million, will be performed over five-year period. An initial purchase order, in an amount that is not material to the company, have already been awarded. Elbit Systems of America signed a Memorandum of Understanding (‘MOU’) with the United States Army’s Watervliet Arsenal (WVA), New York, which will effectively employ WVA as a subcontractor to Elbit Systems of America on many mortar components. The award of the mortar weapon systems solidifies Elbit Systems of America’s position as the leading provider of mortar systems for the U.S. Army.

Haifa’s Elbit Systems is an international high technology company engaged in a wide range of defense, homeland security and commercial programs throughout the world. The Company, which includes Elbit Systems and its subsidiaries, operates in the areas of aerospace, land and naval systems, command, control, communications, computers, intelligence surveillance and reconnaissance (‘C4ISR’), unmanned aircraft systems, advanced electro-optics, electro-optic space systems, EW suites, signal intelligence systems, data links and communications systems, radios and cyber-based systems. The Company also focuses on the upgrading of existing platforms, developing new technologies for defense, homeland security and commercial applications and providing a range of support services, including training and simulation systems. (Elbit 23.11)

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2.6 Canadian-Israeli Venture Fund Will Invest in Next-Generation Cyber-Security

One of the world’s first venture funds devoted to homeland security is being launched in Toronto to invest in Israeli and Canadian cyber-security, intelligence and physical security technology companies. The AWZ HLS Investment Fund has already invested in two Israeli companies and is vetting investments in other Canadian and Israeli companies. Homeland security is one of the fastest-growing industries in the world, projected to grow to $544 billion by 2018. (AWZ HLS 25.11)

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2.7 SafeDK Announces $3.5 Million in Series A Funding to Scale its Mobile SDK Management Platform

SafeDK has closed a Series A investment round of $3.5 million from Samsung Next Tel Aviv, Marius Nacht, StageOne Ventures, Kaedan Capital, as well as leading angel investor Leon Waisbein. This funding round follows a seed investment of $2.25 million that was announced in November 2015 and was led by StageOne Ventures. The company is also announcing the release of the first ever iOS SDK Management Platform, after the completion of a successful iOS beta integration in hundreds of thousands of mobile devices. The Android solution was launched less than a year ago and is already deployed on millions of mobile devices worldwide. SafeDK will use the funds of the current financing round to scale its operation, increase hiring and enhance its expansion in the US market.

Herzliya’s SafeDK is a complete mobile SDKs management platform which enables app publishers to build better and safer apps. SafeDK covers the entire span of the app development cycle, from finding the top-rated SDKs in the SafeDK Marketplace, to ongoing monitoring and real-time control of SDKs. (SafeDK 28.11)

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2.8 InfinityAR Raises $18 Million in a Round Led by Strategic Partner Alibaba Group

Infinity Augmented Reality has closed an $18 million Series C financing round. The round was led by the Alibaba Group, the largest online and mobile commerce company in the world in terms of gross merchandise volume, with participation from InfinityAR’s existing Series B investor, SUN CORPORATION, a large Japanese public company. The funds will allow InfinityAR to finance additional research and development of its product offerings at a faster pace, as well as marketing activities such as the establishment of a customer integration and support group.

InfinityAR has pioneered its solution for augmented reality headsets by using standard, off the shelf, mobile cameras and IMU to efficiently map the environment while also enabling Inside-Out Marker-less Orientation and Positional Tracking (SLAM) for the augmented reality world. This combination makes InfinityAR’s engine the perfect solution for enabling all glasses with the ability to understand their surroundings. InfinityAR’s engine enables vendors of AR headsets to reduce their cost, reduce motion to photon latency, and reduce power consumption, by way of using the inside-out SLAM approach.

Petah Tikva’s InfinityAR’s vision is about creating a new digital environment that will allow people to naturally interact with augmented content in their physical surroundings. InfinityAR’s augmented reality development engine enables accurate 3D digital scene representation of one’s current physical environment, using basic, affordable hardware. It is designed to turn any device into a powerful content augmentation platform, so developers can quickly and easily introduce applications with rich AR experiences to market. (Infinity AR 29.11)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 Jordanian Private Hospital Investment Volume at JD3 Billion

Investments in the private hospital sector amounted to over JD3 billion, said President of Jordan’s Private Hospital Association, stressing the importance of the medical tourism’s input in the national economy. He told a seminar on therapeutic tourism, held within the 8th International Conference of the Royal Medical Services, that the private hospital sector provides jobs for a large number of Jordanians in various technical and administrative fields. Though qualified medical staff is the key to a successful therapeutic tourism, there is a shortage in specialists due to a brain drain in the sector as Jordanian doctors are lured by better jobs abroad. Nevertheless, competitive medical prices in the Hashemite Kingdom, which are the lowest compared with other countries, especially given the distinguished service. (AMMONNEWS 19.11)

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3.2 General Dynamics Wins $65 Million Iraq Contract

Michigan-based General Dynamics Land Systems has been awarded a $65 million cost-plus-fixed-fee foreign military sales contract for contractor logistic support and training for M1A1 tanks and M88A2 recovery vehicles for Iraq. Bids were solicited via the Internet with one received. Work will be performed in Iraq (85%); and Sterling Heights, Michigan (15%), with an estimated completion date of 31 December 2017. (US DoD 24.11)

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3.3 Kuwait Confirms Plans to Buy 28 Boeing F-18 Jets

Kuwait plans to buy 28 Boeing F-18 Super Hornets, 10 days after the US State Department notified Congress of the possible sale of 40 of the warplanes to the Gulf Arab state. The chief of the military’s Armament and Procurement Authority also said Kuwait planned to return a number of outdated F-18s in its inventory as part of the purchase deal. The fighter aircraft are increasingly important to Kuwait amid rising regional tensions between Saudi Arabia and Iran, whose struggle for regional pre-dominance underpins wars and political tensions across the Middle East. Kuwait, an ally of Saudi Arabia, is also part of a Saudi-led coalition in Yemen. Boeing, Northrop Grumman Corp, Raytheon Co and General Electric Co are the prime contractors for the proposed sale. (Reuters 28.11)

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3.4 France’s Monoprix to Open its Largest Hypermarket in Doha

Doha Festival City, which opens its doors in February next year, has taken a step closer towards completion, confirming the inclusion of the largest Monoprix Hypermarket worldwide. The renowned French retail chain will boast more than 35,000 goods within its 7,000 sq m location, including several product lines that will be new and exclusive to Qatar from both local and international brands, a statement said. It added that Qatar’s new store will include the widest range of organic, fresh items from local farmers while it will be home to an authentic French bakery, a waffle house and a “Cave Fromage” which will be stocked with a wide selection of the finest international cheeses. Monoprix will be just one of more than 500 retail brands opening on site – with other offerings including fine and casual dining, green spaces as well as indoor and outdoor entertainment hubs. (QB 26.11)

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3.5 HondaJet to Debut in the Middle East

Greensboro, N.C.’s Honda Aircraft Company announced that it will showcase the HondaJet at the Middle East Business Aviation Association (MEBAA) Conference in Dubai, the region’s premier business aviation event. The appearance at the Dubai World Central – Al Maktoum International Airport will mark the first time a HondaJet will be on public display in the Middle East. With a maximum cruise speed of 422 knots (486 mph) the HondaJet is the fastest jet in its class; it soars highest in its class with a maximum altitude of 43,000 feet; and it is the most fuel-efficient light jet in its class by up to 17%. It has an NBAA IFR range of 1,223 nautical miles (1,408 miles).

The HondaJet is the fastest, highest-flying, quietest, and most fuel-efficient jet in its class. The HondaJet incorporates many technological innovations in aviation design, including the unique Over-The-Wing Engine Mount (OTWEM) configuration that dramatically improves performance and fuel efficiency by reducing aerodynamic drag. Honda Aircraft Company is a wholly owned subsidiary of American Honda Motor Co., Inc. Founded in 2006, Honda Aircraft’s world headquarters is located in North Carolina, the birthplace of aviation. (Honda Aircraft 22.11)

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3.6 US to Sell Qatar F-15QA Aircraft with Weapons and Related Support

The State Department has made a determination approving a possible Foreign Military Sale to the Government of Qatar for F-15QA aircraft with weapons and related support, equipment and training. The estimated cost is $21.1 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale on 17 November.

The Government of Qatar requested to purchase seventy-two (72) F-15QA multi-role fighter aircraft and associated weapons package; the provision for continental United States based Lead-in-Fighter-Training for the F-15QA; associated ground support; training materials; mission critical resources and maintenance support equipment; the procurement for various weapon support and test equipment spares; technical publications; personnel training; simulators and other training equipment; U.S. Government and contractor engineering; technical and logistics support services; and other related elements of logistical and program support. The estimated total program value is $21.1 billion. The proposed sale improves Qatar’s capability to meet current and future enemy air-to-air and air-to-ground threats. Qatar will use the capability as a deterrent to regional threats and to strengthen its homeland defense. Qatar will have no difficulty absorbing these aircraft into its armed forces.

The prime contractor will be Boeing Corporation of Chicago, Illinois. The Purchaser typically requests offsets. Any offset agreement will be defined in negotiations between the purchaser and the contractor. Additional contractors include:

Astronautics Corporation of America, Arlington VA
BAE Systems, Arlington, VA
Elbit Systems of America, Fort Worth, TX
General Electric Aviation of Cincinnati, OH
Honeywell Aerospace, Phoenix, AZ
Lockheed Martin Aeronautics Company, Fort Worth, TX
L3 Communications, Arlington, TX
NAVCOM, Torrance, CA Raytheon, Waltham, MA
Rockwell Collins, Cedar Rapids, IA
Teledyne Electronic Safety Products, Thousand Oaks, CA
UTC Aerospace Systems, Charlotte, NC

Implementation of this sale requires the assignment of approximately 24 additional U.S. Government and approximately 150 contractor representatives to Qatar. This notice of a potential sale is required by law and does not mean the sale has been concluded. (DoS 17.11)

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3.7 UAE & Nokia Sign World’s First Deal to Control Operation of Drones

Nokia and the UAE’s General Civil Aviation Authority (GCAA) have entered into a collaboration to drive the development of a system to allow the operation of drones by both businesses and government agencies in a safe, secure and managed environment. At the heart of the new ecosystem will be Nokia’s UAV Traffic Management (UTM) concept, which is being developed to manage drones in and around cities. The Nokia UTM system will provide capabilities such as automated flight permissions, no-fly zone control and beyond-visual-line-of-sight (BVLOS) that are critical for the safe operation of UAVs in densely populated urban areas. The ecosystem will also serve as a testing ground for various applications of drone technology, which can be explored in a safe and controlled environment, according to a statement.

Operations at Dubai’s main airport, the world’s busiest for international passengers, were halted for an hour on 29 October, delaying 40 flights. It was the third time they had been temporarily stopped in four months because of drones. Nokia said its UTM concept will be able to monitor airspace and flight paths, and share data between UAVs, operators and air traffic controllers and establish no-fly zones that can be continually refreshed with the latest data. (AB 21.11)

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3.8 Dubai Firm Inks $1.6 Billion JV Deal for Algerian Steel Plant

Emarat Dzayer Group, a Dubai-based conglomerate, and Groupe Imetal, a Government of Algeria entity, have signed an agreement to develop a $1.6 billion steel plant in Algeria’s Annaba Province. The agreement will create Emarat Dzayer Steel Company, a joint venture in which Groupe Imetal will hold 51% stake through its two subsidiaries – Naftal (41%) and Asimdal (10%) – with 49% held by Emarat Dzayer Group. Emarat Dzayer Steel Company said it will produce 1.5 million metric tons of directly reduced iron per year and 1 million metric tons of steel in the form of rails, steel structures and seamless pipes. The value added products of this plant will generate and save foreign exchange reserve and thereby support the local economic growth.

Bilateral trade between Algeria and the UAE stands at AED3.6 billion in 2015 and UAE investments in Algeria amounted to more than $9 billion. The joint venture will also set up a manufacturing, blending and packaging facilities of lubricants and industrial lube oils catering auto, aviation, marine and industrial. (AB 22.11)

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3.9 Saudi Aramco to Form JV with US’ Rowan Companies to Operate Offshore Drilling Rigs

Rowan Companies said it was forming a joint venture with Saudi Arabian state oil company Saudi Aramco to operate offshore drilling rigs in the country. Rowan said it would provide three jack-up rigs and Saudi Aramco two when the joint venture begins operations in the second quarter of 2017. Both companies would contribute $25 million as working capital. Rowan will supply two more rigs in late 2018 and Saudi Aramco will make a matching cash contribution. Rowan said the rigs would receive contracts for an aggregate 15 years, renewed and re-priced every three years, provided that the rigs meet the technical and operational requirements of Saudi Aramco. (AB 25.11)

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3.10 DNAFit Partners with Gold’s Gym in Egypt

Gold’s Gym Egypt and UK company DNAFit announced their official partnership. For the first time in Egypt, people will be able to attain their individual fitness goals not only based on expert advice, but with the guidance of their genetic makeup. Through this partnership, people will be able to receive a personalized report explaining to them details such as their response to power or endurance exercise, food sensitivities, and recovery time. Education regarding how to read and understand these reports will be available as well. DNAFit has signed an exclusive agreement with the Gold’s Gym Academy to provide the training and certifications to the community. These courses will be available starting early January 2017. DNAFit is a UK based genetics company that reports on genetic markers related to fitness and nutrition. (DNAFit 18.11)

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3.11 Russia’s REMA RTI Enters Algeria Through Partnership with Hidra Hydraulique

Algeria’s Hidra Hydraulique and Russian REMA RTI have signed a partnership for the manufacture of hydraulic equipment in Algeria as Russia seeks to foray into the North African country buoyed by a growing manufacturing industry. The agreement will provide, in the first stage that will last two years, for the marketing of the Russian partner’s products in Algeria, before the building of a factory specializing in the manufacturing of these products in the province of Tiaret (340-km west of Algiers). According to the agreement, the Russian company will share its experience and expertise in the field with the Algerian side. (Hidra Hydraulique 18.11)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Dubai’s First Sustainable Buildings Will Have Urban Farm & Recycled Grey Water

Diamond Developers, the company behind the $354 million The Sustainable City in Dubailand, is planning to launch two “sustainable” apartment towers in Arjan, next to Miracle Gardens, by end-December. The buildings will produce most of the energy needed to run the common areas using solar panels on the roofs and grey water will be recycled to be used for cleaning purposes. It will have a waste sorting system, an energy-efficient chilled water system, a shuttle bus service to the nearest Dubai metro station, and a small urban farm that will be used by tenants for education purposes. While apartment prices will be equivalent to prices in the neighborhood, the developer claims the cost of the running the buildings will far less than conventional ones.

The first phase of The Sustainable City includes 500 residential villas, 11 biodome greenhouses running the length of the central green spine, 3,000 square meters of urban farming and a 15,000 square meter mixed-use area. Work on the second phase will commence in the first quarter 2017, with the new phase including Hotel Indigo, the first net-zero energy hotel in the Middle East, an environmentally-friendly school, and an innovation center, first negative lifecycle building. Currently, there are 250 families living in the city, with the occupancy levels expected to touch 80 to 90% by end. (AB 23.11)

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4.2 Saudi’s Acwa Power Wins Tender to Develop Fourth Phase of Moroccan Solar Complex

A Saudi based company has won the tender to develop the fourth phase of Noor Ouarzazate solar power complex located in the Souss-Massa-Dra’a area in Morocco. Nour Ouarzazate is a large scale solar power complex located 10 km away from Ouarzazate and currently produces 160 MW of energy during the day and has a stock capacity of 3 hours overnight. The Saudi corporation Acwa power deals with the development and exploitation of central electric parks and water units and has recently won the market for Noor Ouarzazate’s 4th phase of development. Acwa’s win is far from surprising as Acwa Power’s participation in Noor Ouarzazate’s development has been significant so far. They had won the markets for phases 1, 2 and 3 of development.

Noor Ouarzazate’s fourth phase will consist in the development of photovoltaic technology that should have a capacity of 135 MW and will cost approximately MAD 2.2 billion DH. Acwa power is currently present in more than 11 Middle Eastern and North African countries. (Acwa 16.11)

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5: ARAB STATE DEVELOPMENTS

5.1 Lebanon’s Falling CPI Continues – Led by Lower Fuel Prices

According to Lebanon’s Central Administration of Statistics (CAS), the economy’s average inflation rate stood at -1.42% year-on-year (y-o-y) by Oct.2016. Primarily, “Transportation” (13.10% of CPI) and “Water, electricity, gas, and other fuels” (11.9% of CPI) sub-indices recorded the steepest respective declines of 4.78% and 10.51%, largely due to the downward trend of oil prices. The “Food and non-alcoholic beverages” sub-index (20.6% of CPI) fell by an annual 1.43%; similarly, the “Health” sub-index (7.8% of CPI) slid by a yearly average of 2.24% by October 2016. In contrast, the average prices of “Clothing and footwear” (5.4% of CPI), “Restaurant and Hotels” (2.6% of CPI) and “Recreation, Amusement, and culture” (2.3% of CPI) rose by 4.08%, 2.63% and 1.54%, respectively. Over the same period, average prices for the Education sub-index (5.9% of CPI) also rose by 1.69%. On a month-on-month basis, October’s CPI edged up by 0.91%, compared to September 2016. Regionally, the CPI of each of the individual regions of Beirut, Mount Lebanon, North, Bekaa, South and Nabatieh displayed rises. In fact, the largest monthly CPI increases were witnessed in both Bekaa and Nabatieh, recording 1.62% and 1.60% respectively. The smallest monthly change was recorded in Beirut, with a slight 0.52% uptick. (CAS 23.11)

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5.2 Lebanese Industrial Exports Down by 24% Year-on-Year in September

According to the Ministry of Industry, the value of total Lebanese industrial exports dropped from $242.5M in September 2015 to $184.3M in September 2016. The main exported products were Machinery and Electrical Equipment with a value of $47.3M, Products of the Chemical Industries with a value of $31.2M, Prepared Foodstuffs with a value of $30.7M and Base metals and articles of base metals with a value of $16.2M. The most notable declines were seen in the export values of Products of the Chemical industries and Base Metals and Articles of Base Metals as they went from $48.00M and $28.6M in September 2015 to $31.2M and $16.2M in September 2015, respectively. The top export markets for Lebanese industrial products were Saudi Arabia, Iraq and the UAE with respective shares of 12.7%, 12.6% and 9.6% in total exports. As for imports of Machinery and Industrial Equipment, they fell from $13.8M in September 2015 to $16.2M in September 2016. In September 2016, the imports of machinery for food industries took the largest share in total imports with a value of $3.6M of which $1.1m were imported from China. Machines used for wrapping purposes accounted for $1.3M of which $0.7M were imported from Germany. (MoI 23.11)

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5.3 Total Number of Registered New Cars in Lebanon Falls by October 2016

According to the Association of Lebanese Car Importers, the total number of newly registered commercial and passenger cars fell 4.10% year-on-year (y-o-y) to 33,311 cars by October 2016. The number of registered commercial cars increased by 12.79% y-o-y to 2,170 in October, while the number of registered passenger vehicles dropped 5.09% to reach 31,141 cars during the first ten months of the year.

Japanese model cars grasped the largest market share in total passenger cars, with a share of 37.20% by October 2016, followed by Korean cars, with a market share of 36.45%, and European cars with 20.49% of the total market share. Moreover, only American cars observed an increase in their sales with a rise of 12.09% y-o-y, while European, Japanese, and Korean cars’ sales slid 4.35% and 8.66%, and 4.60%, respectively. In terms of car brands, Kia maintained its top rank, with the largest share of 19.76% of newly registered passenger cars, followed by Hyundai, Toyota and Nissan with respective shares of 14.84%, 13.49%, and 9.57%. (ALCI 19.11)

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5.4 Jordan’s Public Sector Largest Worldwide in Relative Terms

The enormity of the public sector is one of the main reasons that affects the Jordan’s economic competitiveness. The Economic and Social Council’s (ESC) “Jordan Competitiveness 2015”, issued recently, added that the size of the Kingdom’s public sector is the largest in the world given its ratio to population, in addition, the sector is inundated with red tape, low productivity and wasta (favoritism) that hinder the Kingdom’s competitiveness, authors said. The ESC report highlighted the main challenges and obstacles that have an adverse impact on the Kingdom’s competitiveness in different sectors, including education, health tourism, water and infrastructure. The public sector’s impact on competitiveness was one of these main causes for low productivity, the report said, urging measures to reform public service and ensure equal opportunity in appointments. Jordan’s public sector also lacks training, follow up and accurate evaluation of employees. (JT 26.11)

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5.5 WB Says Jordan’s Education Outcome Below Average Despite Investment In Sector

Although Jordan has significantly invested in education services, student learning outcomes remain below international average, the World Bank’s Jordan Economy Monitor showed. The report, entitled “Riving Slowing Economy”, indicated that Jordan has invested significant national resources in the provision of education services with around 3.5% of gross domestic product (GDP) for pre-tertiary education, which is comparable to international averages and above what might be expected given its per capita GDP. The student learning outcome is, however, below international averages, affecting the competitiveness of Jordan’s labor force with wide disparities across governorates.

The report indicated that average student performance as measured in international learning assessments is also low and although Jordan outperforms the Middle East and North Africa region in math and sciences, gains have been relatively small and unsteady. The report showed that many university graduates are out of work and that there is a lack of skilled technicians. Ensuring that teachers are efficiently deployed to where their skills are most needed is another priority area for teacher reform in Jordan. Due to absence of a purposeful allocation, teachers tend to gravitate towards better-off schools and easiest-to-teach subjects, widening learning inequalities and creating shortages in critical teaching areas, it added. (AMMONNEWS 26.11)

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5.6 WB Observes Jordan’s Economic Growth is in Line with Average Growth in MENA

The Jordanian national economy growth forecast of 2.3% for 2016 is in line with the average growth rate for the Middle East and North Africa region, the World Bank said. In its Jordanian Economic Monitor – Fall 2016 report, the world bank said that Jordan’s economic growth has been subdued in the last year as spillovers from regional instability take a toll. Growth of 2.1% in H1/16 slightly declined compared to 2.2% in H1/15. Jordan has been managing spillovers from the Syrian crisis including closure of trade routes with Iraq and Syria and hosting more than 656,000 registered Syrian refugees with UNCHR, with an estimated 1.3 million Syrians in Jordan as per the census. While the Jordanian economy has held up with growth generated from a number of sectors, it has been losing momentum, the WB said, adding that the outlook is subject to downside risks. Containing the fiscal deficit and implementing the new IMF program will be challenging as some adjustment measures could be considered socially sensitive, the report noted. (AMMONNEWS 11.24)

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►►Arabian Gulf

5.7 Qatar’s Health Giant Says Largest Expansion Phase Underway

Qatar’s state-owned healthcare provider has announced that it has started the largest expansion phase in its history with the opening of a new communicable disease center. Hamad Medical Corporation said the addition of the facility brings the total number of its hospitals to nine, with three more set to open over the next six months. Four new hospitals – the Communicable Disease Centre, Qatar Rehabilitation Institute, Ambulatory Care Center and Women’s Wellness and Research Center – will significantly increase capacity across their system and provide state-of-the-art environments to provide care for their patients.

HMC was established by Emiri decree in 1979 but its oldest facility, Rumailah Hospital, has been caring for patients since 1957. When all services have relocated to the new hospitals, between 9,000 and 10,000 patients per week will use the services and the total floor space across HMC will increase by 65% following the full opening of the new hospitals. The upcoming plans build on the capacity increase that has already taken place across HMC over the past year. The Neonatal Intensive Care Unit at Women’s Hospital, Pediatric Emergency Center Al Sadd and Bone and Joint Centre have all been expanded, while the Enaya Continuing Care Centre and a new surgical services facility have both opened. (QB 26.11)

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5.8 Qatar’s Foreign Trade Surplus Shrinks 34% in October

Qatar’s foreign trade surplus shrank by 34% from a year earlier to QR7.7 billion ($2.11 billion) in October, according to data from the Ministry of Development Planning and Statistics. The surplus slumped from more than QR11.6 billion in the year-earlier period because of low natural gas and oil prices. Exports of petroleum gases and other gaseous hydrocarbons fell 19.8% to QR11 billion, according to the data.

A report by BMI Research added that Qatar has enough foreign reserves to pay for more than a year of imports. Researchers forecast that Qatar’s current account would return to surplus in 2017, after the country posted its first deficit since 1998 this year. However, the deficit – at 3% – poses “little risk to economic stability” in Qatar, as it can be financed through “tremendous” reserves and debt issuance.

Earlier this year, Qatar cut its planned spending on building healthcare facilities by about two-thirds this year following the drop in energy prices. The world’s top liquefied natural gas exporter is one of the richest countries per capita but it faces a QR46.5 billion ($12.8 billion) budget deficit this year because of the continued lower oil and gas prices. Like other Gulf states, it is turning to international markets to bridge the gap but it is also having to reduce and prioritize state spending. (Various 29.11)

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5.9 UAE Defense Industry Market Valued at $31 Billion

Research and Markets has announced the addition of the “Future of the UAE Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2021” report to their offering.

The report stated that the UAE’s defense expenditure is valued at $23.5 billion in 2016 and registered a CAGR of 4.51% during this period. The UAE’s defense expenditure is projected to grow at a CAGR of 6.59%, to value $31.8 billion by 2021. On a cumulative basis, the country is expected to invest $140.8 billion for defense purposes, of which $53.1 billion is earmarked for capital expenditure to fund defense procurements. The protection of vital infrastructure, the territorial dispute with Iran, and ongoing domestic defense industry building initiatives are expected to drive the country’s future defense spending. The defense budget is expected to increase further during the forecast period, due to the country’s aim to develop its own domestic defense industry. The UAE MoD is expected to invest in military IT networking, fighters and multi-role aircraft, reconnaissance and surveillance aircraft, infrastructure and logistics – construction and Infantry Fighting Vehicles (IFV). (R&M 18.11)

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5.10 Dubai Raises Innovation Stakes, But Still Room for Improvement

Dubai has improved its ranking to claim 15th place globally on the second edition of the Dubai Innovation Index, which was released by the Dubai Chamber of Commerce and Industry on the sidelines of the UAE Innovation Week. The survey was launched by the Chamber in cooperation with PricewaterhouseCoopers (PWC), analyzed 28 top global innovation cities. The DCCI plans to invest AED100 million on innovation-focused projects over the next three years.

This year, the emirate moved up one position and outperformed business hubs such as Madrid, Milan, Shanghai and Moscow. New York secured the top position in the index, while London fell to fourth place after placing first last year. European cities ranked higher in general due to an increase in investments on skills and talent, while GCC cities scored high marks in the political, economic and social indicators category, a statement said.

The Dubai Innovation Index, one of the leading pillars of the Chamber’s innovation strategy, highlighted the Dubai government’s ongoing efforts in spearheading innovation initiatives in the emirate, the private sector’s significant contribution, and increased public-private sector collaboration. The Index showed that Dubai’s private sector has started embracing innovation as companies become more proactive about implementing new ideas. Business have also recognized the importance of finding and retaining the best talent required to drive innovation, it said. (AB 21.11)

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5.11 IMF Says VAT Will Generate $1 Billion for Oman Government

The International Monetary Fund (IMF) is estimating $1 billion (OR 385 million) windfall for the Omani government from value added tax (VAT). The consumer tax, not conspicuously stated yet, will account for nearly 1.5% of the GDP though the amount can fluctuate depending on variables such as compliance rate and exemptions. VAT is expected to have a certain degree of negative impact on Oman’s GDP due to tightening liquidity in and lower disposable income due to dwindling oil prices. The GCC countries will implement VAT from January 2018. (Various 20.11)

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5.12 Saudi Youth Unemployment Forecast to Exceed 42% by 2030

Youth unemployment in Saudi Arabia is expected to increase from 33.5% last year to over 42% in 2030 as the Middle East continues to struggle to create enough jobs for its growing population, according to a new report. Bank of America Merrill Lynch said the private sector in the Middle East and Africa is still “largely underdeveloped to create sufficient formal jobs”. The report added that at the same time the region’s public sector, which is the traditional employer of university graduates, is “overcrowded”.

“The region has one of the highest rates of youth unemployment in the world where many young people therefore end up in informal work or inactivity,” the report said. Conversely, the report also showed that despite the unemployment problem, 55% of Saudi Arabia’s employers feel that domestic graduates are prepared for the job market, amongst the highest in the world. The study said the MENA region spends $84 billion on education, 9% of total global expenditure, adding that failing to remediate the education deficiencies in low/middle income countries “could pose a serious threat to security in the Middle East”. (AB 26.11)

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5.13 Saudi Builder Says Nearly $100 Million Worth of Projects Delayed

Saudi Arabian construction firm Abdullah Abdul Mohsin al-Khodari and Sons said on 22 November that projects worth 362.2 million riyals ($97 million) had been delayed due to factors ranging from clients’ funding shortages to slow visa issuance. The pace of construction in Saudi Arabia has cooled in the past two years as lower oil prices stall project funding and slow government payments, tightening banking liquidity and squeezing contractors. Khodari, which last month reported a wider third-quarter net loss, said its total project backlog was 3.01 billion riyals by 30 September. That compared to 4.67 billion riyals at the same point of 2015. The firm, a builder of housing and infrastructure, said its total contract value was 7.78 billion riyals.

Delays built up when issuing visas, appointing consultants and making changes to designs, it said. Delays in the review and processing of invoices and work stoppages due to lack of money were also to blame. Signs that the backlog of payments owed to contractors might be easing have emerged, construction firms have recently received 40 billion riyals, representing 25% of money owed to them by various government agencies. (Reuters 22.11)

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►►North Africa

5.14 Egypt’s Unemployment Rate Up to 12.6% in Third Quarter

Egypt’s unemployment rate slightly increased to 12.6% in the third quarter of 2016 from 12.5% in the previous quarter, CAPMAS announced on 16 November. The number of unemployed people increased by 80,000 from July to September 2016, resulting in a total of 3.6 million Egyptians seeking work. Egyptians aged 15 to 29 make up 81.4% of those unemployed. CAPMAS said that unemployment among females in Q3 reached 25.9% compared to 25.6% in Q3 of 2015, while unemployment among males increased to 8.7% from 8.5%. Urban unemployment increased to 14.2% from 14.1% in the first quarter, while in rural areas, it reached 11.4% from a previous 11.2%. The total labor force increased in the third quarter by 289,000 from the second quarter in 2016 to reach 28.8 million Egyptians. The Egyptian government says it aims to reduce the unemployment rate to less than 10% by the end of the fiscal year 2018/19 based on a targeted growth rate in the economy of at least 6%.

Egypt suffers from a relatively high unemployment rate and has been struggling to restore economic growth since a 2011 uprising toppled President Mubarak. The Egyptian government aims to slash the unemployment rate to less than 10% in 2018. (CAPMAS 16.11)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 OECD Slashes 2016 Growth Forecast for Turkey

The Organization for Economic Cooperation and Development (OECD) has slashed its 2016 growth forecast for Turkey to 2.9% in its latest outlook, down from 3.9% in its previous estimate. The OECD said that the Turkish economy continues to face geopolitical headwinds and unsettled political conditions, after having weathered a coup attempt in July and engaged in military operations in Syria. Uncertainties are high but fiscal, prudential and monetary policies are supportive and should spur household consumption from late 2016 onwards, it noted, adding that the economy has so far proven resilient to severe shocks. GDP growth is projected to pick up in 2017 and in 2018, driven by recovering household consumption and gradual increases in exports. It forecasts growth of 3.3% in 2017, again lower than it had earlier expected, and 3.8% in 2018. (HDN 28.11)

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6.2 Foreign Tourist Arrivals to Turkey Drop 26% In October, Though Russians Returning

The number of foreign arrivals to Turkey dropped by 25.8% to 2.45 million in October, compared to the same month in 2015, temporary data from the Tourism Ministry showed on 29 November. This was the smallest shrinkage in foreign arrivals in the last seven months, as Turkey’s tourism industry struggles amid political and security concerns. The number of foreign people visiting Turkey declined to 22.7 million in the first 10 months of 2016, a 31% drop compared to the same period of 2015, after a series of bomb attacks, a diplomatic crisis with Russia, and the failed July 15 military coup attempt.

While the number of Russians visiting Turkey plunged 78.3% in the first 10 months of the year compared to the same period in 2015, the latest data has showed some recovery after bilateral ties between the two countries started to normalize. Russia again became the second largest source of Turkey’s foreign tourists in October, as some 222,719 Russians visited Turkey, representing a huge rise compared to the figures recorded at the peak of the diplomatic crisis. Germany again became the top source for Turkey, with more than 491,000 Germans visiting the country in October, despite an average 33% fall in arrivals from Europe. Georgia became the third largest tourist sender for Turkey, with more than 178,000 tourists visiting the country. In the first 10 months of the year, Germany, Georgia and the UK were the top sources of foreign arrivals to Turkey, the ministry’s data showed. (HDN 29.11)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Many Countries Send Firefighting Aircraft to Israel

With terrorists setting fires that were blazing across the country, Israel asked for help from its friends and neighbors. Some twenty-one firefighting planes aided Israel in fighting the fires. The first planes that reached Israel from abroad were three from Greece and immediately after came three planes from Turkey, two from Italy and one from Cyprus. Russia sent two Beriev Be-200 planes, capable of carrying 12 tons of water. A C-130J Super Hercules military transport aircraft belonging to the Cypriot Air Force brought some 70 Cypriot firefighters to aid Israeli efforts. Two planes from Croatia and also planes from Azerbaijan and Ukraine worked in the area. Egypt sent two firefighting helicopters. According to the Ministry of Foreign Affairs, Spain also sent planes, and Belarus, Britain, Bulgaria, Czechia, Georgia, Portugal, Romania and Switzerland all offered their assistance. The American Supertanker, a Boeing 747-400, came from Colorado Springs in the US. The Supertanker was the only aircraft capable of fighting fire at night; the other air crews return to Tel Aviv hotels overnight.

The Palestinian Authority sent eight firefighting teams that helped in the north and Jerusalem Mountains. Prime Minister Netanyahu telephoned Palestinian President Abbas to thank him for sending the personnel and fire trucks. (Ynetnews 26.11)

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7.2 Some 89% of Israeli Parents Vaccinate Their Children

According to a new survey on behalf of the Israel Medical Association and the Israel Pediatric Association, the majority of Israeli parents with children up to six years old, 89%, vaccinate them thoroughly. Most of them, 70%, do so without pause or concern. The survey, which was conducted by the Geocartography polling company among 360 parents, also revealed that to a “lesser” or “greater” degree, around one-third of parents are hesitant and have doubts about vaccinating their children. Despite the reservations, 82% of the parents said the advantages to vaccinating their children outweigh the disadvantages. Official figures, meanwhile, show that only 2% of children are completely unvaccinated and 9% are only partially vaccinated.

The vaccinations that arouse the greatest reservations and objections among parents are against the flu (16% of parents), HPV and polio (5% each), chickenpox (4%) and rotavirus (2%). In comparison to a previous survey from 2008, fewer parents object to vaccinating their children against chickenpox, while more parents object to flu, polio and HPV vaccinations. One in every four parents also believes that children are over-vaccinated.

Among the Jewish population, only 72% of parents say they have “trust” or “a great deal of trust” in doctors’ recommendations, compared to 79% in the last survey. Among the Arab population, that number has dropped from 97% to 75%. Around 60% of parents have been exposed to information that vaccinations might be harmful to a child’s health, a 10% rise in comparison to the previous survey. (Various 20.11)

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7.3 Israel’s Arab & Jewish Fertility Rates Equal For First Time, New Report Finds

Israel’s Central Bureau of Statistics announced on 15 November that fertility rates among Jewish and Arab women in Israel are, for the first time, equal, standing at an average of 3.13 children born to each woman as of 2015. At the end of 2015, there were 2.798 million children (aged 0 – 17) living in Israel, making up 33% of the total population. Some 1.996 million (71.3%) of these children are Jewish, 718,000 (25.7%) are Arab and 84,000 (3%) are listed as “other” or non-Arab Christians.

In Jerusalem, children make up about 40% of the city’s population, whereas in Haifa and Tel Aviv-Jaffa, they make up about a fifth of the population, at 23% and 21% respectively. The household income in homes with children averaged was 1.3 times that of households without children, at NIS 17,658 ($4,587) per month, as compared with NIS 13,624 ($3,540) per month. At the same time, household spending in homes with children was 1.4 times that of households without children, at NIS 14,677 per month ($3,814), as compared with NIS 10,422 ($2,707) per month. The monthly expenditure on education of households with children in the uppermost decile was found to be 3.5 times that of households with children in the lowermost decile, at NIS 2,501 ($650) and NIS 712 ($185), respectively. (CBS 15.11)

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7.4 Ethiopian Immigrants Closing Education Gaps

Data published on 28 November by the Central Bureau of Statistics, on the occasion of the Ethiopian Jewry holiday Sigd, show that Ethiopian immigrants are closing gaps with the general population in the field of education and higher education. There are currently 141,200 citizens of Ethiopian origin in Israel, 55,500 of them born in Israel with one parent or more born in Ethiopia. In 2015, only 91 Ethiopians immigrates to Israel, the lowest number since 2000, and less than half the number of immigrants in 2014 (213). Most citizens of Ethiopian origin live in central (38%) and southern (24%) Israel. The city with the highest number of Ethiopian immigrants is Netanya (11,400), while the city with the highest percentage of Ethiopian Israelis is Kiryat Malachi (16.8%).

Israelis of Ethiopian origin marry later than the general Jewish population; 90% of them marry Ethiopian Israelis, men more than women (95% and 87%, respectively). The divorce rate among the Ethiopian Israeli community is higher than the general Jewish population (16 out of 1,000 married people compared with 9 out of 1,000 among the general Jewish population). The percentage of single-parent families is also particularly high among Ethiopian Israelis, 29%, twice as high as in the general population.

In the 2014/15 school year, 48.4% of school students of Ethiopian origin studied in state-religious schools (elementary and secondary education). This figure has been gradually declining in the past decade (compared with 58.4% in the 1994/95 school year). In elementary and secondary education, students of Ethiopian origin seem to be managing to close gaps with other students: in 2015, 89% of them took Bagrut (matriculation) tests, compared with 94% among the general population, while the number of dropouts was slightly lower than the percentage among all Jewish students: 1.21% compared with 1.40%. The average Psychometric Entrance Test score of students of Ethiopian origin was 448 points. Although the score is lower than the national average (541 points), it constitutes a significant improvement from the score in the 1990/2000 academic year, which was 375.4.

In 2015/16, 2,583 students of Ethiopian origin studied for a BA degree. Most of them studied in academic colleges (55%), about a third of them in universities (32%) and 13% in academic colleges of education. More than two-thirds of undergraduate students (72.4%) among Ethiopian Israelis were women, compared with 57.9% among the general population. Overall, there were 2,966 students of Ethiopian origin in higher education establishments, 87.1% of them undergraduate students, 12.0% graduate students and 0.6% of them PhD students. (CBS 28.11)

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7.5 Doctor Becomes First Colonel of Ethiopian Descent in IDF History

The Israel Defense Forces has its first colonel of Ethiopian descent, whereby Lt. Col. Dr. Avraham Yitzhak has been appointed chief medical officer for the Southern Command and will be promoted to the rank of colonel. Yitzhak completed high school in Addis Ababa at age 15 and was the first Ethiopian immigrant to earn a medical degree in Israel. He graduated from Ben-Gurion University of the Negev in 1999 and was valedictorian of his class. Yitzhak was also the first Ethiopian Israeli to serve as an IDF physician. (Various 22.11)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 Technion Opens New Integrated Cancer Center

Technion inaugurated a new center for Cancer Research on Sunday, 20 November. The Technion Integrated Cancer Center (TICC) is the first center of its kind in Israel, which will combine the extensive knowledge and vast experience in oncology accumulated at Technion and its affiliated medical centers. According to the Technion President, the Center is expected “to bring about a dramatic change in the field of cancer medicine in Israel, through diagnosis, treatment and follow-up based on the principles of personalized medicine.

Over the past three years, Technion has recruited leading experts in cancer research, in both basic science and practical applications. They are renowned researchers in the fields of cancer biology, cancer cell metabolism and computational biology, who will cooperate in order to understand the pathways of the formation of cancer cells, unravel the mechanisms that make them resistant to anticancer drugs, and promote the development of new tools for diagnosis, treatment and follow-up care. Research activity at the Center will be conducted in collaboration with researchers from the Technion Faculties of Engineering and with the five medical centers affiliated with Technion’s Rappaport Faculty of Medicine, in order to forge a connection between the laboratory, clinical practice and applied research.” (Technion 20.11)

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8.2 Telehealth Startup Tyto Care Receives FDA Clearance

Tyto Care announced that the U.S. FDA has granted 510(k) clearance for its digital stethoscope, a device that will be part of its advanced set of examination tools now being introduced to the world of telehealth. Tyto Care is launching a comprehensive telehealth solution that includes state-of-the-art digital tools for examining the ears, throat, skin, heart, lungs and temperature and a cloud-based platform with video conferencing. By enabling a more comprehensive picture of the patient’s health and an enhanced remote diagnosis, Tyto Care is providing the critical missing link in the delivery of telehealth.

Until today, telehealth was limited because clinicians had to rely on phone or video conferencing only to examine and diagnose a patient, without the benefit of a physical exam. By providing vital physical exam data, Tyto extends the reach of the clinician beyond the four walls of the clinic. TytoCare’s modular exam tools and fully integrated telehealth platform enable a remote examination of the heart, lungs, heart rate, temperature, throat, skin and ears. Examinations can be done in real time as part of a live video telehealth visit, or in advance of a telehealth session. The company is introducing two new products: TytoPro for clinicians to capture and share remote examination data, conduct a specialist consultation, or get a second opinion, and TytoHome for consumers to use at home to connect with a clinician. TytoHome includes proprietary guidance technology that enables anyone to easily and reliably capture exam data at home.

Netanya’s Tyto Care’s mission is to delight consumers and clinicians alike by delivering easy, affordable and high quality telehealth visits, complete with medical exams, all from the comfort of home. (Tyto Care 01.11)

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8.3 Israel’s Novatrans Could Save 7 Billion Male Chicks from Unnecessary Slaughter

Every year, the poultry industry kills up to 7 billion male chicks simply because they do not produce enough meat (or eggs) to justify raising them to adulthood. While the female chicks are spared for egg laying, the male chicks are eliminated and disposed of by hatcheries through suffocation, maceration – a process that involves a conveyor belt and a giant blender – or other methods in a procedure known as male chick culling. The male chicks are generally killed soon after they hatch and shortly after their gender has been determined.

However, a technology called TeraEgg developed in Israel by Novatrans, can determine whether the egg will hatch into a male or female chick before incubation, preventing the hatching of eggs containing male chicks. Novatrans’ TeraEgg, which recently completed its early testing phase, analyzes organic compounds to identify the gender and fertility of eggs before incubation through a non-invasive process that uses terahertz spectroscopy (electromagnetic waves). This technology is able to determine whether it is male, female, or infertile through the detection of gasses that leak from the pores of the egg within seconds, rather than allowing the chicken to hatch – a process that otherwise takes around three weeks. In other words, TeraEgg detects gender and fertility in the chicken embryo development process, allowing hatcheries to remove male and infertile eggs before they enter incubation, so they can be re-purposed for human consumption rather than destroyed post-incubation.

By eliminating the egg industry’s practice of chick culling, TeraEgg hopes to reduce energy costs and labor without disrupting hatchery operations, as well as to create new revenue streams for egg hatcheries. (Novatrans 23.11)

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8.4 Evogene Announces Positive Field Trial Results in Ag-biologicals Program

Evogene announced positive field trial results conducted in Israel from its Ag-biologicals program, which is currently focused on the development of Bio-stimulant products. In these tests, candidate microbial strains identified and predicted by Evogene for their ability to improve corn resistance to drought conditions, yielded positive efficacy and stability results in the first year of field testing. Initiated in 2015, Evogene’s Ag-biologicals program is currently focused on developing microbial based solutions targeting yield improvement and environmental stress tolerance in key crops, such as corn, soy and wheat. These biologically derived agriculture solutions are based on microbial communities that reside on or within the plant’s immediate microbial environment (also known as microbiome).

Rehovot’s Evogene is a leading biotechnology company for the improvement of crop productivity for the food, feed and fuel industries. The Company operates in three key market segments: improved seed traits (addressing yield increase, tolerance to environmental stresses and resistance to insects and diseases); innovative ag-chemicals (developing novel herbicide solutions for weed control) and ag-biologicals. Evogene has collaborations with world-leading seed and ag-chemical companies. (Evogene 16.11)

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8.5 Zebra Medical Vision Launches “Profound” – Medical Scan Analysis from Home

Zebra Medical Vision is launching “Profound” – a breakthrough service intended to help millions of people receive fast, accurate medical image analysis nearly instantly, over the web. The company’s new service allows people to upload their medical imaging scans such as CTs and Mammograms to Zebra’s online service, and receive an automated analysis for key clinical conditions. Profound will allow users from Europe, Asia, the Pacific Rim and Latin America to receive analysis highlighting the presence of the following conditions, by simply uploading these scans to the Zebra platform.

From research to reality and commercialization, Kibbutz Shefayim’s 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. (Zebra 23.11)

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8.6 B. Braun / Trendlines Partnership Leads to ApiFix Investment

Germany’s B. Braun Melsungen, The Trendlines Group and ApiFix jointly announced B. Braun’s lead position in ApiFix’s B round financing; ApiFix is a Trendlines portfolio company. B. Braun’s Aesculap division invested $2.8 million in the $5 million round which is to close by end of 2016. ApiFix is disrupting the scoliosis device market with its minimally invasive, non-fusion spinal implant system for the correction of Adolescent Idiopathic Scoliosis (AIS). Traditional surgical correction is a highly invasive procedure involving fusion, which results in a rigid spine and low patient quality of life. The ApiFix system is implanted in a minimally invasive procedure and does not require fusion, thus maintaining spine flexibility and high quality of life. The global market for ApiFix is over $1.15 billion. ApiFix received CE Mark in 2012 and is marketing its device in Europe. More than 100 operations have been performed with the ApiFix implant; first patients are now 4-years post-surgery. Clinical results and patient quality of life are excellent.

B. Braun, one of the world’s leading providers of healthcare solutions, began partnership activities with Trendlines in 2015. Trendlines and B. Braun have established mutual deal flow to identify potential new investment opportunities and are working together in the establishment of incubators and collaboration in the development of new technologies, solutions, and products. B. Braun invested approximately $5 million in Trendlines as a cornerstone investor in Trendlines’ 2015 initial public offering in Singapore. B. Braun and Trendlines have executed a memorandum of understanding for co-investment in Trendlines Medical Singapore, Trendlines’ first incubator outside of Israel.

Misgav, Israel’s Trendlines Group is an innovation commercialization company that invents, discovers, invests in, and incubates innovation-based medical and agricultural technologies to fulfill its mission to improve the human condition. As intensely hands-on investors, Trendlines is involved in all aspects of its portfolio companies from technology development to business building. (Trendlines 28.11)

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8.7 Zebra & Clalit Announce Algorithm That Can Increase Osteoporosis Detection by 50%

Zebra Medical Vision and Clalit Health Services are announcing the completion of a software algorithm which uses existing CT data to identify candidates for bone density screening, allowing earlier identification of patients at higher risk of Osteoporotic fractures. The osteoporosis algorithm was developed in collaboration with the Clalit Research Institute and has received wide interest from various healthcare providers around the world. The breakthrough in the algorithmic research of Zebra Medical Vision and Clalit Health Services is in the ability to calculate bone density using CT scans that are performed for other purposes, thus identifying population at risk of osteoporosis, without the need for additional procedures or radiation. These patients can then be referred to preventative care programs, helping reduce fracture rates and the overall burden of the disease.

Focused on Deep Learning and Computer Vision Innovation, Kibbutz Shefayim’s Zebra Medical Vision uses big healthcare data to deliver an increasing list of insights to the healthcare industry. Current insights are in the fields of Bone, Liver, Lung and Cardiovascular health. Its Imaging Analytics Insights allow health care institutions to identify patients at risk of disease and offer improved, preventative treatment pathways for patient care. (Zebra 28.11)

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8.8 Valtech Cardio Agrees to be Acquired by Edwards Lifesciences

Valtech Cardio announced an agreement to be acquired by Edwards Lifesciences Corporation (Edwards). The acquisition will give Edwards access to the Cardioband Reconstruction System (Cardioband) for trans catheter repair of the mitral valve and tricuspid valve of the heart.

Cardioband received CE Mark certification in September 2015 after demonstrating safety in a clinical trial among patients with functional mitral regurgitation. Cardioband permits physicians to repair the mitral valve in a first-line setting while preserving the option to perform future percutaneous or surgical valve repair and/or replacement. Cardioband TR is designed to enable physicians to reconstruct the tricuspid valve using the same technique and implant as the Cardioband mitral valve repair technology. The company is recruiting patients for its CE study in Europe.

Prior to the closing, Valtech will spin out its early stage Cardiovalve program, and as part of the agreement, Edwards will retain an option to acquire the Cardiovalve program at a later date. Cardiovalve is a trans catheter, transseptally delivered, low-profile, mitral valve replacement (TMVR) system following the Valtech way of delivering surgical based solutions without the risk of surgery. The Cardiovalve platform has an orientation-indifferent structure for reduced implant complexity and was designed from inception to enable trans septal delivery.

Or Yehuda’s Valtech Cardio, founded in 2005, is a privately held company specializing in the development of devices for mitral and tricuspid valve repair and replacement. Aside from Cardioband, Valtech’s portfolio includes a surgical valve repair portfolio and a trans catheter valve replacement, Cardiovalve, in development. Valtech has full in-house development, manufacturing and clinical research capabilities, as well as over 150 patents and patent applications. (Valtech Cardio 28.11)

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8.9 MinInvasive New Financing Round & Strategic Partnership with MicroPort Scientific Corporation

MinInvasive announced the completion of a financing transaction and a strategic partnership with Shanghai’s MicroPort Scientific Corporation. MicroPort is leading a financing round in MinInvasive and will be granted an exclusive right to distribute OmniCuff in the China market.

The field of shoulder rotator cuff repair is a fast growing market segment within the sports medicine market with over one million procedures performed worldwide annually and an annual growth rate of 7%. The OmniCuff System enables arthroscopic rotator cuff repair, which obviates the need for suture anchors, provides the clinical advantages of minimally invasive trans osseous repair and reduces overall procedure costs.

Magal’s MinInvasive, founded in 2011 in the ATI incubator, is a privately held medical device company, with key investors Anatomy Medical Technology Fund, Access Medical Ventures and several private investors from Israel and the US. The company has developed the OmniCuff System – a disposable device enabling arthroscopic, trans osseous rotator cuff repair that obviates the need for suture anchors. The company recently completed a successful post-market multi–center clinical study in leading medical centers in the US with excellent clinical results and high patient and surgeon satisfaction. The company plans to initiate commercialization of the OmniCuff System with a partner in the US in 2017. (MinInvasive 29.11)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Olam Announces Deployment of Phytech Technology in Australian Almond Orchards

Olam, a global leader in almond production, announced it has deployed the Phytech plant-centric technology service across five company orchards in the Sunraysia and Riverina regions of south eastern Australia. The total Olam area covered by the service for the 2016/17 season now exceeds 5,000 hectares, with a mixture of mature and new plantings. The deployment follows successful implementation across 700 hectares during the previous season that resulted in increased growth rates and higher yields while reducing water usage.

China’s Olam International is a leading agri-business operating across the value chain in 70 countries, supplying various products across 16 platforms to over 16,200 customers worldwide. From a direct sourcing and processing presence in most major producing countries, Olam has built a global leadership position in many of its businesses.

With financial backing from Mitsui & Co and Syngenta Ventures, Kibbutz Yad Mordechai’s Phytech is an Ag analytics company focused on helping farmers understand their plant health status and needs. Proprietary sensor hardware, installed in the field, along with data analysis and predictive algorithms are combined to form a subscription service model, delivered through a simple smart phone and web based user interface. Phytech deliver an unparalleled value proposition to the grower, ensuring they no longer need to purchase expensive field sensors or interpret the complicated data they create. (Olam 16.11)

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9.2 CyberArk Adds Credential Theft Blocking to Expand Privilege Protection at the Endpoint

CyberArk announced new behavioral analytics to block and contain advanced threats targeting credential theft at the endpoint. CyberArk Viewfinity, with enhanced threat protection features, is now available as CyberArk Endpoint Privilege Manager. CyberArk also released new research from CyberArk Labs demonstrating security weaknesses in Windows operating systems that allow attackers with local administrator rights to steal and use encrypted service credentials to achieve lateral movement and full domain compromise. This research supports a recent FBI flash alert that recommends prioritizing credential protection, including implementing least privilege and restricting local accounts, to limit a threat actor’s ability to gain highly privileged account access and move throughout a network.

CyberArk Endpoint Privilege Manager protects against advanced threats that exploit privileged credentials by interlocking three core capabilities: privilege management, application control and new targeted credential theft detection and blocking to stop and contain damaging attacks at the endpoint.

CyberArk Endpoint Privilege Manager now helps organizations detect and block credential theft attempts by malicious users and applications including Windows credentials, remote access application credentials and those credentials stored by popular web browsers such as corporate network and cloud applications. CyberArk is also able to block hash harvesting at the endpoint to prevent Pass-the-Hash, an attack leveraging stolen credentials.

Petah Tikva’s CyberArk is the only security company focused on eliminating the most advanced cyber threats; those that use insider privileges to attack the heart of the enterprise. Dedicated to stopping attacks before they stop business, CyberArk proactively secures against cyber threats before attacks can escalate and do irreparable damage. The company is trusted by the world’s leading companies – including 45% of the Fortune 100 – to protect their highest value information assets, infrastructure and applications. (CyberArk 16.11)

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9.3 PacketLight’s PL-2000M Delivers New Standard of Performance for Data Center Interconnect

PacketLight Networks launched the PL-2000M, the new standard for optical transport solutions for high speed, high security data center interconnect (DCI) and metro networks. The new Muxponder/Transponder provides a 30% decrease of the solution cost and x2 increase of the spectral efficiency, thus saving wavelength resources and enabling higher fiber and metro network utilization. It’s the most compact, highly integrated transport solution available, enabling enterprises to cost-effectively build-out or upgrade existing networks. The product supports carrier-grade coherent 200G tunable uplink, capable of serving multiple applications and protocols such as data, storage, OTN and TDM.

The PL-2000M offers lowest power consumption and the smallest footprint of its kind, together with onboard physical layer encryption, to drive significant reduction in capital and operating expenditure for business and carriers, while preparing them for evolving security requirements.

Tel Aviv PacketLight Networks offers a suite of Leading 1U Metro and Long Haul CWDM/DWDM and OTN solutions as well as Layer 1 optical encryption for transport of data, voice and video applications, over dark fiber and WDM networks, featuring high quality, reliability and performance with encryption capability at affordable prices. Their products are distinguished with low power consumption ideal for CLE (Customer Located Equipment) allowing maximum flexibility as well as ease of maintenance and operation and providing real Pay-as you-grow architecture. (PacketLight Networks 16.11)

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9.4 Optimal+ Saves Customers over $250 Million During 12-Month Period

Optimal+ announced the results of its first worldwide analysis of customer yield improvements and cost savings based on the company’s semiconductor solutions. From October 2015 through October 2016, Optimal+ analyzed customer data from over 50 billion devices to determine total customer cost savings enabled by the company’s products through improved yield, efficiency and quality. Optimal+ customers collectively saved in excess of $250 million during the 12-month period. The internal Optimal+ analysis conclusively revealed the advantages of using big data to enable better enterprise-wide decision making through increased global supply chain visibility.

Holon’s Optimal+ is the only big data analytics software company providing an end-to-end solution that measurably improves quality, yield, and productivity for semiconductor and electronics manufacturing. From chip to board to system, our enterprise-grade solutions ensure that all of your global manufacturing data is collected, cleaned and analyzed in real time, enabling decisive actions that enhance, certify and monitor the quality of semiconductor and electronic products over their entire lifetime. (Optimal+ 16.11)

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9.5 AnyClip Recognized as Second Fastest Growing Company on Deloitte Israel Technology Fast 50 List

AnyClip, the world’s first personalized, content-driven video advertising platform, has been ranked second on the Deloitte Israel Technology Fast 50 list, a program recognizing and honoring the 50 fastest growing technology companies in Israel. The company secured second place based on its 5,141% revenue growth since 2012. During that time, AnyClip also grew its annual video ad impressions from millions to several billions and expanded its reach to include over 100 million unique monthly users worldwide. During 2016, AnyClip also opened offices in New York and London to support its global growth.

The Deloitte Israel annual Technology Fast 50 program recognizes and honors the 50 fastest growing technology companies in Israel (private and publicly-held). To qualify, companies must operate in any area of technology and own proprietary technology. The Fast 50 programs is a springboard towards Deloitte’s regional and global programs. Winners of the Fast 50 are automatically eligible to participate in the regional Deloitte Technology Fast 500 program.

Tel Aviv’s AnyClip is the world’s first personalized, content-driven video advertising. AnyClip identifies consumers and their preferences on the most relevant digital media and delivers them personalized, content-driven video ad experiences. This increased personalization creates deeper connections with audiences, increases ROI for brands and agencies, and opens new monetization opportunities for content owners and publishers. (AnyClip 29.11)

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10: ISRAEL ECONOMIC STATISTICS

10.1 Israeli Economy Grew by 3.2% During Third Quarter

The Central Bureau of Statistics announced on 16 November that Israel’s GDP economic growth in the third quarter of 2016 was 3.2%. The growth rate was higher than the forecasts; however, revised figures for the second quarter show 4.9% growth, meaning that the economy actually slowed slightly in the third quarter. The third quarter figures are an initial estimate, and are likely to change significantly later. One concrete example of this is the growth figures for the first quarter. The initial CBS growth estimate published in April was 0.8%, albeit it now says that first quarter growth was 3.2%, the same as in the third quarter.

Third quarter growth was led by investment in fixed assets, which spurted 12.2%, while consumer spending, the economy’s growth engine over the past two years, rose by a relatively moderate 2.9%. The new figures are particularly welcome as investments were considered an alarming weak point in the economy in previous quarters. Exports of goods and services were again weak, however, dropping 6.3%, compared with a 6.3% rise in imports of goods and services. (CBS 16.11)

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10.2 Israel’s Unemployment Rate Hits All-Time Low

The Central Bureau of Statistics reported that Israel’s employment rate for October dropped to an all-time low of 4.5%. In September, the unemployment rate rose to 5%. The data indicate that the level of employment for Israelis aged 15 and over in the workforce remained unchanged, at 61.2%, while the percentage of Israelis aged 15 and over in the workforce declined in October to 64.1%, from 64.4% in September. A further improvement in employment figures was noted in the number of Israelis usually working full time (35 hours per week or more), which rose 9% from September 2016. In addition, the number of employees usually working part-time (less than 35 hours per week) declined 0.3% in October.

The data showed that unemployment for both men and women dropped from 4.8% to 4.3% in October. Overall, the CBS found that for the first time in Israel’s history, unemployment among Israelis aged 25 to 64 hovers near the 4% mark. Men’s jobless rates were set at 3.8%, while among women in this age group, unemployment was at 4.1%. The data further showed that 179,000 Israelis registered with unemployment bureaus nationwide in October, compared to 199,000 in September, representing a 10% drop. Employment rates climbed to 80%, with 78% of Israelis holding full-time jobs and 22% holding part-time jobs. The number of Israelis holding full-time jobs grew by 29,000 in October, and the number of Israelis holding part-time jobs shrunk by 22,000. Among Israelis aged 25 to 64, 85% of men and 75.5% of women are employed. Employment rates among teenagers ages 15 to 18 remained unchanged, at 61.2%. (CBS 21.11)

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10.3 Israel’s Wealthy Number 105,000 Millionaires and 18 Billionaires

According to a report by Credit Suisse, 17,000 Israelis became millionaires in 2016 alone, an increase of 19% from 2015. However, while the average Israeli’s wealth has doubled since 2000, income inequality has steadily risen. Approximately 2% of Israelis have holdings in excess of $1 million, while 32% total between $100,000-$1,000,000, 42.5% between $10,000-$100,000 and 23.5% under $10,000.

The number of millionaires in Israel, defined as possessing more than $1 million worth of holdings (cash, property and investments), stands at 105,000 people, of which 18 are considered billionaires. This constitutes an increase of 17,000 people, roughly 19%, in the amount of millionaires since 2015. Additionally, 25 people in Israel hold an estimated fortune of $500 million-$1 billion, while 277 people hold between $100-$500 million. Indeed, over the last 16 years, the average Israeli citizen’s wealth has doubled from $92,589 to $176,263. The median wealth of an Israeli citizen stood at only $54,384—about a third of the average wealth.

The Gini Index, which measures income inequality in countries, measured Israel at 77.2%. The index is measured on a scale of 0-100, with 0 representing perfect equality and 100 representing perfect inequality. The majority of wealth (70%) that Israelis hold is financial instruments such as cash and other securities, while the other 30% is comprised of real estate and other properties. In contrast, Israel’s debt stands at an average of $29,800 per person, or roughly 14.5% of the wealth of the average person. (Ynetnews 25.11)

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10.4 New Israel Poverty Index Ranks Jerusalem Near Bottom

A Central Bureau of Statistics report announced the socio-economic ranking of 255 communities in Israel, ranking them from 1-10. Jerusalem, which has double the population of Tel Aviv, is among the poorest large cities with at least 200,000 residents. The reason for such a low ranking is the large and growing numbers of Orthodox and Arab residents. This is in contrast to Rishon LeZion and Petah Tikva who are seeing large influxes of young, educated people.

The index affects a plethora of economic issues, chief of which are recently designed tax benefits for Israeli communities such as proximity to the center of the country, distance from borders and economic standing of population clusters. Government ministries are also making use of the newly released information, with the ministries of education and welfare both using the information to invest in weaker areas. However, not all public institutions make positive use of this information, with many banks closing branches in areas that are designated as weaker, forcing residents to find alternative arrangements.

Tel Aviv, whose 2013 population reached 417,503 inhabitants, was ranked 8. From 2008 – 2013, both Rishon LeZion — 237,406 inhabitants and Petah Tikva — 217,951 inhabitants, climbed from a score 6 to a score of 7. Haifa, with a population of 271,963, maintained its ranking of 7.

At the bottom of the rankings are the major cities of Ashdod, which has 216,113 inhabitants and a score of 5, and Jerusalem, which has 827,804 inhabitants and a score of 4. The vulnerable communities in the country are mostly ultra-Orthodox, Arab and Bedouin, such as Beitar Illit, Modi’in Illit, Naveh Midbar, Rahat, Shaqib al-Salam, Tel as-Sabi, Ar’arat an-Naqab, Hura, Kuseife, Lakiya and Al-Kasom.

In contrast, the highest ranking communities in Israel include Kfar Shmaryahu and Savyon, both scoring 10, while Shoham, Ramat Hasharon, Har Adar, Kokhav Yair, Kfar Vradim, Lahavim, Meitar and Omer all received a ranking of 9. (Ynet 19.11)

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10.5 Israel’s Income Gap Narrows

The Central Bureau of Statistics announced on 16 November that monthly net money income per household in Israel was NIS 15,427 at the end of 2015 and monthly spending per family was NIS 12,323. Monthly gross income from all sources (labor, capital, allowances, and support) averaged NIS 18,671 per household, a 2.5% real increase, compared with the preceding year. Spending on consumption, which includes the estimated spending on housing services, totaled NIS 15,407 per household. Both average monthly income and spending rose 3% in 2015, compared with 2014. The biggest expenses for households were housing, transportation, and communications. The income gap between the top and bottom deciles was much wider than the gap in spending.

The Central Bureau of Statistics also reported that 96.9% of households in Israel have at least one mobile telephone. 80.3% have a computer, 40.9% a tablet, 74.3% an Internet connection and 82.6% of households have a solar water heater.

The Gini index of inequality between households in income distribution according to net money income fell to 0.366 in 2015. Despite the narrower gaps, the Central Bureau of Statistics noted that the top decile earned 8.2 times as much and spent 2.6 as much as the bottom decile. The net income of the top two deciles accounted for 38.9% of total household income, compared with 6.4% for the bottom two deciles and 54.7% for the middle six deciles (deciles 3-8). (CBS 16.11)

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11: IN DEPTH

11.1 LEBANON: Lebanese Hospital Care: Structural Deficiencies Hindering Development

Tied to the economic, political, social and demographic aspects of the country, healthcare in Lebanon is definitely one of the most challenging sectors to deal with. Besides its 3% contribution to the GDP, the healthcare system, and mostly hospitalization, suffers from various deficiencies: inequitable spending at the expense of the Lebanese households, inefficient public healthcare coupled with inflated private services, and numerous financial shortages and burdens deriving from inflows of refugees escaping the war in Syria.

Given the specialized services provided by hospitals from diagnosis and treatment to intensive care, hospitalization is one of the primordial constituents of the Lebanese healthcare system. Hence, hospitals can best reflect the several deficiencies in Lebanon’s health sector. While the latest World Bank data revealed that Lebanon’s health spending and transfers were estimated at $3.12B in 2014, hospital care spending hit the $1.3B mark, which is almost 40.3% of the total health bill and 2.8% of the GDP.

In terms of financing agents, the Ministry of Public Health (MoPH) is the biggest spender on hospitalization in Lebanon. According to the latest national health accounts in 2012, the MoPH allocated $287M (23% of the total hospitalization bill) to private and public hospitals with the former grasping 80% of the budget. Households came second with a share of 21.8% ($272m) and were followed by each of the National Social Security Fund (NSSF) contributing to 16.9% of the bill, the private insurance companies (15.0%), the Army (8.7%) and the Civil Servants Cooperative (6.8%). However, Mr. Sleiman Haroun, President of the Syndicate of Private Hospitals, revealed that “total hospitalization expenditure reached $1.7B in 2015, of which 53% were covered by all public insurers (i.e.MoPH, NSSF, Cooperative of public employees, Internal Security Forces, Army etc.…) and the remaining $800m were covered by private insurances, mutual funds and Out of Pocket payments from individual patients. As to the Ministry of Public Health alone, its annual budget for hospitalization was $282m.”

Elevated Cost for Households

Despite the existence of numerous spenders, Lebanese households are bearing a substantial stake of the health bill. In fact, health’s share averaged 7.7% of households’ expenses in 2012. Out-of-pocket yearly hospital services totaled $386/household (22.95% of their health expenses), standing second after expenses on pharmaceutical products (50.83%). Households also pay for health insurance averaging $93/year, which is an additional financial burden.

The considerable stake of uninsured Lebanese households is another alarming reality amid the insufficient hospitalization budget allocated by the MoPH. As a matter of fact, the share of uninsured is estimated between 35% and 45% of the Lebanese population. These households are usually treated at the expense of the MoPH at both private and public hospitals. Worth noting, the MoPH allocates a yearly budget per hospital to admit uninsured patients, upon discretion of the health minister. Once the budget per hospital is totally disbursed, usually by mid-month, private hospitals tend to either accept emergency cases bearing the risk of delayed payments by the ministry, or transfer them to public institutions which cannot turn any patient away. When asked about the substantial number of uninsured patients, Dr Walid Ammar, Director General of the MoPH, stated that “health coverage in Lebanon is universal, however the ministry needs some time to procure the expenses above the ceiling, estimated at $40m in 2015, hence the delayed payments”.

Hospitals’ Current Status

In case of hospitalization providers, the comparison between public and private hospital care highlights the extent of difficulties at public facilities. State hospitals, constituting near 18.6% of total hospitals (24 public hospitals) mainly suffer from 3 types of problems: managerial, financial and political. Boards of directors at public hospitals are highly politicized as they are appointed by government decrees. Hence mismanagement leads to obsolete equipment and frail maintenance. In addition, unmet commitments by health guarantors, especially the MoPH, led in public hospitals to frequent cases of unpaid employees’ salaries and lack of basic care for patients. According to the President of the Lebanese Order of Physicians, Professor Raymond Sayegh, “it became common practice for hospitals and other agencies to postpone the payments due to doctors, which is being worsened by the lack of an efficient health policy in Lebanon.”

The lack of proper means at public hospitals led patients to resort to private hospitals to get a better quality of service even if it meant incurring higher tariffs and increased commuting to reach trusted hospitals. In fact, patients have the option of receiving medical services at public hospitals for a 5% contribution of the bill versus a higher payment of 15% at private hospitals. The remaining amount should be covered either by health guarantors for insured patients or by the MoPH when the patient is uninsured.

The escalating number of Syrian refugees bolstered demand for hospitalization amid constant supply. In fact, the additional demand of displaced Syrians is negatively impacting the quality and delivery times of services, in addition to subjecting hospitals to financial hardship. Dr. Ammar noted that, “unlike private hospitals, public hospitals must admit Syrian refugees as Lebanese nationals; hence they are the most to bear the additional financial burdens.” Dr. Ammar also added “the health cost of Syrian refugees is estimated at $300m, of which $60 – $70m originates from hospitalization.”

On a different note, a 75% subsidy is usually provided by the United Nations High Commissioner for Refugees for eligible outpatient and life threatening inpatients. The biggest concern of Lebanese hospitals is the remaining 25% that should be covered by the displaced Syrians themselves. In fact, without a full coverage authorization from the MoPH or a support from Non-Governmental Organizations, many of the Syrian patients fail to pay the remaining hospital fee heavily weighing on hospitals’ finances.

Several Reforms Were Undertaken, Others Could Be Considered

While concerns may arise due to the current aspects of hospitalization, in 2014 the MoPH tackled the inefficiencies in private sector hospital contracting through a new contracting mechanism based on key hospital performance indicators. According to World Bank sources, this is a major policy reform that will improve the efficiency of public spending on hospital care. Other suggested reforms to improve hospitalization include involving nonprofit organizations in the day-to-day supervision of public hospitals’ operations, or even privatizing the management or engaging in Public Private Partnerships so as to bring efficiency gains through increased competition and improved performance.

Health cards for uninsured patients are another suggestion that could ensure extra funds to the ministry. Mr. Haroun explained that “the gap between the actual hospital bill and the amount covered by the MoPH could be filled through the issuance of health cards for an annual fee of $150/uninsured patient. If 2 million citizens are uninsured, the ministry can procure an additional income of $300m.” This solution, which is expected to improve social justice for all Lebanese and provide a yearlong access to hospitalization, was proposed to parliament but not approved yet due to the previous political stalemate.

In order to temper the hospital crisis over the long term, the government should promote preventive healthcare. The uneven allocation of resources in favor of curative health is costing the government much more than if it would focus on the cheaper preventive care. Preventing illness is a beneficial step as it will definitely ease the burdens of hospitals while reducing the government and patients’ payments. The World Bank has indicated that the Ministry of Public Health is moving in that direction to shift the care model more towards prevention and primary healthcare by supporting and developing the network of Primary Healthcare Centers. The World Bank is collaborating with the Ministry of Public Health in piloting a program that targets vulnerable Lebanese affected by the influx of Syrian refugees, with a subsidized package of primary healthcare services.

Finally, hospitalization in Lebanon is no different than the other economic activities in terms of dependency on local and regional political and security circumstances. However, the sector is still promising and reforms can be put in place especially that country is still performing better than many of its regional peers. In fact, Lebanon scored 6.8 out of 7 in terms of health according to the 2015 World Economic Forum. (Star 11.11)

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11.2 KUWAIT: Kuwait’s Snap Election Revives Parliamentary Opposition, But Not Reform

David Pollock wrote in The Washington Institute PolicyWatch 2731 on 28 November that while the new legislature is hardly a harbinger of deep reform, broader inclusiveness, or greater personal freedoms, it should be considered another welcome exception to the ‘rule’ that Arab democracy tends to produce instability, Islamist control, or sectarian oppression.

Kuwait held a snap parliamentary election on 26 November, for the seventh time in just the past decade. This small but strategic, oil-rich hereditary emirate at the head of the Persian Gulf, sandwiched between Iran and Iraq, has the only fully functional parliament among the six Arab monarchies in the Gulf Cooperation Council. In this respect it roughly resembles the two other, non-oil-rich Arab monarchies of Jordan and Morocco, where elected parliaments also provide some outlets for popular sentiment and checks on the broad authority of the palace. The result in all cases has been political stability, but bordering on stagnation. True to form, Kuwait’s election, while seemingly boosting the country’s opposition forces, will likely prolong this trend.

More specifically, this latest Kuwaiti exercise in limited Arab democracy provides some intriguing lessons. The previous parliament was dismissed by the emir, as allowed by Kuwait’s constitution, after deputies insisted on their right to grill cabinet ministers regarding controversial policy proposals. In this case those proposals were twofold: first, a cut in petrol subsidies and related forms of official largesse, to cope with the drastic decline in oil prices on which the government and the whole economy largely depend; and second, a further tightening of the ongoing security crackdown on free expression and association — including an unprecedented requirement that every resident of the country submit a DNA sample for purposes of identification and possible investigation.

Both proposals were widely and understandably unpopular. But rather than confront and decide the issues directly, Kuwaiti officialdom took their typical “timeout” by calling an early election. Thus the first lesson of this episode is really a reminder of previous ones: the parliamentary electoral maneuver usually works to defuse a political crisis, but at the price of postponing any serious policy departures, often indefinitely.

Second, the self-styled “opposition” abandoned the boycott approach it used during the two previous elections and was therefore able to score a dramatic comeback at the polls. These longstanding critics of Kuwaiti cabinets and policies are a mixed bunch, the more so as formal political parties are not allowed. Some are Sunni fundamentalists of the Muslim Brotherhood type, known locally as the Islamic Constitutional Movement (ICM); others are more traditional Salafis; and still others emphasize populist, nationalist, or occasionally even liberal positions.

In this iteration, ICM candidates garnered an estimated four of the fifty seats in parliament, plus an equal number of seats that sympathize with their views. Salafis did approximately the same. An additional eight or so seats went to candidates vaguely identified with other currents in the “loyal opposition,” mainly of the populist or nationalist sort. Altogether, about half the chamber can now be regarded as outside the pro-government camp. This stands in sharp contrast to the previous two parliaments, where boycotts guaranteed the government solid majority support.

Significantly, thirty of the previous fifty members were not returned to office. In this sense, at least, the election serves as a safety valve for accumulated frustrations that might otherwise have spilled over into serious protests, as occurred sporadically between elections in 2011 – 2013.

Even so, roughly half of the parliament will remain pro-government. This segment is also a motley crew: some hardcore royalists, some tribal followers, some “service deputies” associated with patronage or other royal family favors, and six deputies from the Shiite minority of this Sunni-majority society. The nearly even balance between opposition and pro-government camps practically ensures both continued controversy and continued policy paralysis. Thus the outlook: stability in the streets, but little real reform.

The Shiite factor deserves special mention in this context. No official statistics on it are publicly available, but a 2015 survey supervised by the author confirmed that Shiites represent nearly a third of Kuwaiti citizens. As is often (though certainly not always) the case with religious or sectarian minorities around the world, they tend to side with a relatively moderate government for protection against intolerant extremists among the majority religion or sect. In Kuwait, social tensions between Sunnis and Shiites have increased substantially in recent years, largely in response to wider regional conflicts in which Iran’s Shiite proxies are usually implicated. But in Kuwait, these tensions almost never escalate to mass violence.

Now that the Sunni opposition is back in the game, the Shiites “lost” three seats compared to the previous parliament, and they will be way down from their seventeen seats in the 2011 parliament, which more nearly reflected their proportion in the electorate. Nevertheless, Shiites remain active, vocal, and lawful participants in Kuwaiti politics and the country’s overall economic and public life. One could rightly say that in a region tragically replete with bloody religious conflict, Kuwait remains an admirable oasis of calm and coexistence. It represents a victory, however fragile, for democracy over demography, and a model of peaceful political intercourse between two branches of Islam.

More broadly, though, how representative will the new parliament be of the country’s overall population? The answer is, not so much. Turnout has been estimated at 70%, considerably higher than in other recent contests, mainly because the opposition returned to the fray. The fifty seats were fiercely contested, with over 400 candidates initially registering for a spot. Yet some three-quarters of Kuwait’s 4.5 million residents consist of noncitizen expatriate workers and several hundred thousand bedoon (stateless) Arab tribal residents in the border areas, none of whom can vote. Female citizens, by contrast, are allowed to vote and run for office, and around 10% of the early candidates in this round were women. But only one was elected, similar to the other occasions since women were granted the franchise in practice a decade ago. This will not be a diverse parliament in that respect, though it is a democratically elected one.

For U.S. policy, the election should be considered another welcome exception to the “rule” that Arab democracy tends to produce either instability or some form of Islamist or sectarian control. Kuwait, small and vulnerable to external threats as it is, is still an important regional U.S. military outpost, global energy partner, and geographic buffer against potential Iranian aggression in the vital Gulf arena. Even if the incoming U.S. administration cares less about democracy abroad, or perhaps even about the Middle East altogether, it would be well advised to breathe a sigh of relief that Kuwait’s election probably makes it at least one strategic country that Washington need not worry much about in that volatile region.

David Pollock is the Kaufman Fellow at The Washington Institute and director of Fikra Forum. (TWI 28.11)

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11.3 SAUDI ARABIA: Saudi Arabia and the Oil Pricing Wars of the Middle East

Hadi Fathallah wrote on 17 November in Sada that regional competition and the lack of a cooperation strategy with its neighbors are compounding Saudi Arabia’s inability to act as an oil price setter.

The 70% drop in oil prices from their all-time highs in 2014 to the current lows of an average of $47 per barrel is severely affecting all hydrocarbon producers, but especially Saudi Arabia. The many overlapping reasons for the slump include an oil glut, lower demand and the expansion of U.S. shale extraction. But none contribute more to the continued suppression of prices as the oil pricing wars between neighboring countries of the Middle East. Countries such as Saudi Arabia, Iraq, Iran, Libya and Kuwait – facing significant fiscal pressure to maintain their economic and social programs and ensure domestic stability – keep dragging final export prices down as they compete for the same market share and to retain clients.

Saudi Arabia is trying to stabilize oil markets and raise prices by meeting with Organization of the Petroleum Exporting Countries (OPEC) members and other non-OPEC producers, such as Russia, to cap production. But after several rounds of meetings, first in Doha in April 2016, then Vienna and Algiers in September, Istanbul and Moscow in October, and with another meeting planned in Vienna for 30 November, getting all producers on board seems nearly impossible. Meanwhile, as Saudi Arabia pushes for production cuts from distant countries such as Russia, Venezuela, Nigeria and Mexico, it has been neglecting rapprochement with neighbors, particularly with sectarian rivals Iran and Iraq. It also lacks a clear marketing and cooperation strategy with its neighboring Gulf Cooperation Council (GCC) producers.

OPEC member states hope that cutting production would stabilize or even increase oil prices. But as OPEC countries only produce 40% of the global oil supply and consume even less than 20%, member countries are now price takers, having lost any control over the markets since 1988, when the OPEC price mechanism fell apart. Global oil prices are generally set by two benchmarks, the Western Texas Intermediate (WTI), which is mostly used in the Americas, and the Brent, which most of the rest of the world follows, though there are smaller ones such the Dubai and Tokyo indexes. But not all oil supply and demand go through these benchmarks. Physical crude oil is sold either directly or indirectly between countries and their respective national oil companies and refineries; independent trading houses such Vitol, Trafigura, Mercuria and Gunvor; or oil and gas companies such as BP, Shell, Eni and Lukoil. Physically traded crude oil prices are usually negotiated directly between the trading parties and set at a discount to WTI or Brent prices. Only financial derivatives such as oil futures and options go through the commodity exchanges.

In fact, global crude oil prices on the Brent and WTI benchmarks are being set irrespective of changes to physical supply and demand. Most notably, new production of shale oil that has come from the United States and Canada, Iran’s increased production and export as global sanctions have eased, all-time high production in Russia and OPEC member countries to compensate for economic downturns, and lower demand as the European Union, Japan, China, and other countries face economic slowdown. Even if OPEC member countries agree to and abide by an oil production freeze or cut, that does not necessarily guarantee a price increase. The market fundamentals of oil pricing are never known with certainty. It is unclear how large the global oversupply glut is, and with absence of full and transparent disclosure of oil production and exports, only oil price reporting agencies such as Platts (and the very few trading houses involved in their price discovery mechanisms) get to determine the Brent and WTI benchmarks, and thus the daily global price of crude oil.

Yet at OPEC and other forums such as the World Energy Congress or the International Energy Forum, Saudi Arabia continues to identify itself and be perceived as the swing producer and “central bank” of the oil supply. Although its leadership, whether new Minister of Energy Khaled Al-Falih or Deputy Crown Prince Mohammad Bin Salman, tries to encourage active investment in the oil markets, Saudi Arabia remains a price taker because its oil is still not freely traded on the open markets. Because the Saudis impose restrictions on buyers for resale, they have to fight to keep each client during every transaction. That pits them against neighboring Middle Eastern rivals such as Iran and Iraq, but also GCC friends such as Kuwait and the UAE, other exporting countries and oil trading houses.

Nevertheless, even though Middle Eastern oil producers are unable to influence global benchmark prices, they continue to contribute to the decline of the final export prices of crude oil. They share the same major export destinations: the European Union, China, India, South Korea and Japan. Not only is Saudi Arabia battling the United States, Russia and other OPEC members on market share for these destinations, it is also battling other Middle Eastern countries with the discount rates to the Brent price benchmark. Each time Saudi Arabia markets its crude oil for export at a certain discount to Brent, for example by three dollars per barrel, Iran undercuts the Saudi official selling price by another dollar, and then Iraq undercuts both by another dollar. Rather than cutting production costs, these countries are producing and exporting more crude to compensate for these discounts. Currently Saudi Arabia is producing around 10.7 million barrels per day, competing with the United States and Russia on the same output level, but it consumes almost half of what it produces. These exporting countries are engaged in a price and volume war of attrition as the European Union’s storage facilities are filled to the brim and China hoards more crude oil even as it develops its own shale reserves.

The oil price wars in the Middle East even go to the sub-state level. For example, in 2014 and 2015, the Kurdistan Region of Iraq sold crude internationally at a higher discount than the central government in Baghdad did as it faced illiquidity and an encroaching Islamic State. The same goes for Libya, as the different regional centers of power in Tripoli, Benghazi, Misrata and Zintan undercut each other selling to independent oil traders in Europe to raise funds for their local militias and governmental services. This creates incoherent export marketing for national governments, who cannot enforce selling at higher prices, and more confusion among their competitors.

If Saudi Arabia continues its tit-for-tat oil strategy with countries like Iran and Iraq and fails to provide a unified oil marketing strategy for the GCC oil-producing states, it risks being perceived not as price stabilizer, but as a bully and a source of volatility on global markets. Saudi leadership could instead meet Iranian and Iraqi pragmatics halfway to coordinate production and marketing and avoid any further volatility. Consolidating exporting positions among GCC countries could create a bigger market player that would give these countries a supply leverage over other producers. Saudi Arabia could also use the Dubai price benchmark – propping it up with physical and derivative contracts to gain more independence from the Brent benchmark, especially with exports headed for Asia – to retake pricing leadership and autonomy from pricing agencies and trading houses and avoid the chaos of sub-state oil exporters.

Hadi Fathallah is an economist and policy adviser focused on energy, food security and political risk in the MENA region. He is a fellow at the Cornell Institute for Public Affairs, Cornell University, and a member of the Global Shapers Community, an initiative of the World Economic Forum. (Sada 17.11)

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11.4 EGYPT: How Will Egypt Spend its $12 Billion from the IMF?

Khalid Hassan posted in Al-Monitor of 27 November that the IMF has approved a $12 billion loan, but how will the Egyptian administration spend this amount, amid allegations of the misuse of previous Gulf loans.

On 11 November, the executive board of the International Monetary Fund (IMF) approved a three-year extended arrangement under the Extended Fund Facility to give $12 billion to Egypt to support the economic reform program developed by the Egyptian authorities. Under the arrangement, $2.75 billion will be disbursed immediately and the remaining amount will be phased over the duration of the program, subject to five IMF reviews.

The economic reform program announced by the government in agreement with the IMF aims to gradually lift subsidies on energy, water and electricity, reduce the budget deficit, cut public spending, restrict allocations for social justice in the new budget and impose new taxes on citizens to increase revenue.

The IMF said in its 11 November press release that the loan mainly aims to reduce the state budget deficit and provide protection for low-income households. Egypt’s budget deficit for 2015-16 stood at 12.2% of the gross domestic product, and the objective is to reduce it to 8.5-9.5% in 2016-17.

The finalization of the IMF deal and the disbursement of the first tranche triggered questions by economic experts about the fate of the received funds. Will the funds be used to boost the Egyptian economy, reduce the budget deficit and provide social protection for the poor, or will they have the same fate as the billions obtained by Egypt from the Gulf states in 2013 against the backdrop of the June 30 protests and the downfall of the Muslim Brotherhood?

Indeed, after the ousting of the Muslim Brotherhood, Gulf aid flowed to Egypt in the form of grants, loans and bank deposits to help the new regime revive the Egyptian economy and rebuild the state. On 7 May, 2014, presidential candidate Abdel Fattah al-Sisi stated in a talk show on CBC satellite TV channel that Gulf aid to Egypt since 30 July 2013 exceeded $20 billion. “Gulf financial aid to Egypt is not $12 or $15 or $20 billion; it is way more than $20 billion,” he said.

On 2 March 2016, Egyptian Investment Minister Ashraf Salman said during a conference on investments in Egypt and the Middle East held in Dubai, “The total financial aid obtained by Egypt from Saudi Arabia, the United Arab Emirates and Kuwait within 18 months after the fall of the Muslim Brotherhood on 3 July 2013, amounted to $23 billion in the form of cash grants, oil shipments and deposits at the Egyptian Central Bank.”

During the conference, Salman asserted that Egypt benefited from this support by implementing reform and structural economic measures to improve the investment environment and attract foreign investments in a bid to rebuild the deteriorating national economy. He explained that Egypt is still reeling under economic hardships with citizens suffering meager living conditions, especially among low-income households.

A statement issued on 26 July by the Central Agency for Public Mobilization and Statistics, a government entity, said that the poverty rate in Egypt is 27.8%.

On 12 October. Abdul Khaleq Abdullah, a political science professor at United Arab Emirates University and adviser to Sheikh Mohammed bin Zayed Al Nahyan, the crown prince of Abu Dhabi, posted on his Twitter account, “Egypt received today a $2 billion deposit from Saudi Arabia, and it’s time to ask how all this Gulf aid is being spent in Egypt. We want a reasonable, calm and convincing answer.”

In a bid to tame citizens’ fears regarding the misuse of the IMF loan funds and the failure to allocate them for the advancement of the Egyptian economy and improvement of living conditions, the Information and Decision Support Center (IDSC) attached to the Egyptian Cabinet issued a press statement on 17 November denying all rumors about the government’s inclination to allocate the IMF loan first tranche to pay off the debts to foreign oil companies of $3.2 billion or to pay off other debts.

The IDSC said it contacted the Ministry of Finance that confirmed the $2.75 billion first tranche from the IMF will be allocated to support the state budget and protect low-income citizens and will not be used to pay off any debts, as some have claimed.

However, Rashad Abdo, an economist and the head of the Egyptian Forum for Economic Studies, told Al-Monitor, “The IMF had asked the Egyptian government to pay off its debts to foreign oil companies from the loan funds, which means that part of the IMF loan will extinguish the state debts and the other part will increase the country’s foreign reserves that had hit rock bottom in the past days, dropping to around $15 billion.”

He added, “Egypt received billions of dollars from the Gulf states, in the form of loans, deposits and grants to support the Egyptian economy and help overcome the critical stage following the rule of the Muslim Brotherhood, especially after the decision to disperse the sit-ins in Rabia al-Adawiya and al-Nahda squares, as cash reserves increased by 10% as a result of financial aid flowing from Saudi Arabia, the United Arab Emirates and Kuwait.” He explained, “Part of the Gulf aid was allocated to increase the foreign cash reserves, another for projects for the development of slums and social housing and infrastructure projects, and another for development projects such as the 1.5 million feddans [2,432 square miles] land reclamation project, the establishment of the new administrative capital and the development of the area around the Suez Canal.”

Abdo said, “Unfortunately, the Egyptian citizen did not feel any change after the Gulf aids. Remittances sent by Egyptians abroad fell excessively as of 2015 amid a deteriorating tourism situation after recent repeated security incidents in Egypt. This is in addition to the drop in Suez Canal revenues, which drained one of Egypt’s main sources of foreign currency revenues and led Egypt to withdraw money from its foreign cash reserves to buy commodities and import the necessary petroleum products. Consequently, Gulf grants became insufficient to pay off debts and buy basic living goods to the point that citizens felt that Gulf aid funds were squandered without any benefits for them.”

He said, “I think the Egyptian citizen will not be seeing a tangible change in the near future, even after the IMF loan. Nations are not built by grants and loans. To build the Egyptian state, we must boost production, set an appropriate investment environment and restore international confidence in the Egyptian economy. Otherwise, no financial aid, whether Gulf loans or IMF facilities, will redress Egypt’s economy, and the ordinary citizen will not feel any change or improvement in his standard of living.” (Al-Monitor 27.11)

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11.5 EGYPT: Egypt’s Economy: Not Out of the Woods Yet

On 18 November Eric Trager posted in the Washington Institute for Near East Policy that a few weeks ago, Egypt appeared to be on the brink. The Egyptian pound, which sold at 5.9 LE/$ at the time of Egypt’s January 2011 “Arab Spring” uprising, had fallen to 8.9 LE/$ on 2 November, while traders were buying dollars for 18.2 LE/$ on the black market.

Meanwhile, as revenue streams from foreign investment, aid from Gulf states and tourism declined, the government instituted stiff capital controls, catalyzing a commodity shortage that became so severe that the Egyptian government raided the sugar supplies of Pepsi and local food company Edita. At the same time, new signs of popular discontent emerged in October: a video of a tuk-tuk driver complaining about the country’s conditions went viral on social media, and when the prime minister visited the Red Sea town of Ras Gharib following a flood, residents protested the government’s slow response and criticized the Egyptian military on television. Most worrying for the government, the Muslim Brotherhood and its allies had called for a “Revolution of the Poor” on 11 November and many anticipated violence: the government claimed that it had shut down a bomb-making factory and arrested militants, while a self-declared leader of the protests vowed to cut off the hands of anyone who attacked the demonstrators.

Yet as has happened many times during the past three years, the doomsday predictions didn’t materialize and 11 November passed without any significant protests. Still, Egypt isn’t out of the woods: while the government has taken significant steps to address its capital shortages in recent weeks, Cairo knows that these steps entail significant pain and could therefore spark unrest.

Indeed, after years of drawing down its cash reserves to defend the pound, the Egyptian government finally lifted currency controls and floated the pound on 3 November. While the move nearly cut the pound’s official value in half and catalyzed an instant spike in prices, it paved the way for the International Monetary Fund to approve a crucial $12 billion loan to Egypt a week later, with $2.75 billion of the loan arriving immediately. Given the political uncertainty of the previous six years, the broad sentiment within Egypt (and one that has been heavily promoted in the Egyptian media) has favored giving the Egyptian government more time to put the economy on the right track, rather than taking to the streets, which many Egyptians fear risks further chaos that would only make a very difficult situation worse. In this sense, the IMF loan was seen within Egypt as a step in the right direction, and seemingly undermined the rationale for the 11 November protests – at least for the time being.

Still, it seems unlikely that the IMF loan will address Egyptians’ economic frustrations on a more permanent basis. First, the loan required Cairo to institute a value-added tax and reduce energy subsidies, with gas prices rising from 16 to 21 cents per liter. While these moves should help stabilize Egypt’s currency reserves and prevent commodity shortages, they create more pain in the short run for a population whose wealth has already been cut in half by the pound’s devaluation. Cairo has tried to address this challenge by increasing the food subsidies on which roughly three-quarters of Egyptians rely. The IMF loan entails directing approximately one% of GDP from fiscal savings towards subsidies and cash transfers to elderly and poor families, as well as preserving programs for school meals, subsidies for children’s medicine and infant milk. Earlier this year, Egyptian mothers protested shortages on subsidized infant formula. The crisis was a major embarrassment for the government and the military ultimately helped resolve the matter by importing formula and selling it at half price.

Second, while Egypt’s weak currency should attract foreign tourists and investments, the operating environment remains challenging for both. Persistent concerns about terrorism and travel warnings have suppressed tourism revenue since the 2011 uprising, and there is little indication that the broader security environment will change to enable a significant influx of tourists anytime soon. Moreover, there are still significant bureaucratic hurdles to doing business in Egypt, as well as significant public-sector corruption, and the government’s prosecution of the chief auditor indicates that this is unlikely to improve in the near-term. To be sure, the early signs are positive: the official and black-market currency rates have converged, and foreign currency inflows have reached $1.5 billion. But stabilizing Egypt’s currency reserves and ensuring its ability to continue subsidizing food requires broader economic reform and security improvements – and it will be especially difficult to enact further economic reform so long as Egyptians are already coping with the pain of less wealth, higher fuel prices, and new consumption taxes.

For this reason, Egypt’s significant economic moves are unlikely to be coupled with political reforms. If anything, the new law on nongovernmental organizations (NGOs), which seeks to establish direct government oversight over all NGOs and penalizes violators with prison sentences of one to five years, suggests that the political environment will only become more restrictive. As one Egyptian official noted, unrest is always possible. Even though the 11 November protests never materialized, he said, anti-government forces would likely call for demonstrations on 25 January, which will be the sixth anniversary of Egypt’s 2011 “Arab Spring” uprising; or maybe on April 6th, which will be the ninth anniversary of the founding of the revolutionary April 6th Youth Movement; or maybe on June 30th, which will be the fourth anniversary of the uprising against Egypt’s first elected president, Muslim Brotherhood leader Mohamed Morsi; or maybe on August 14th, which will be the fourth anniversary of the government’s deadly crackdown on Brotherhood protest sites after Morsi’s ouster. “Every few months,” he said, “there’s a date.”

Eric Trager is the Esther K. Wagner Fellow at The Washington Institute for Near East Policy, where his research focuses on Egyptian politics and the Muslim Brotherhood in Egypt. Dr. Trager has served as an adjunct professor at the University of Pennsylvania, the University of Michigan, and the University of California, and he is the author of the forthcoming book Arab Fall: How the Muslim Brotherhood Won and Lost Egypt in 891 Days (Georgetown University Press, fall 2016). (TWI 18.11)

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11.6 MOROCCO: Morocco Takes Lead in Climate Change Fight, But at What Cost?

Charlotte Bruneau posted in Al-Monitor on 15 November that Morocco is pushing forward with an ambitious renewable energy sector, but its policies may be doing more harm than good.

During the COP22, the United Nation’s climate conference that is currently taking place (7 – 18 November) in Marrakech, journalists are being taken to visit the kingdom’s most ambitious project, the solar plant NOOR I. Noor, which mean “light” in Arabic, is the world’s largest concentrated solar plant and started functioning in Ouarzazate in February. Still under expansion, the Ouarzazate solar plant will cover an area as large as 4,200 football fields (3,000 hectares) and provide electricity for 1.1 million Moroccans.

Morocco has launched an ambitious strategy to reduce its greenhouse gas emissions with a focus on the energy sector, according to a Heinrich Boll Foundation report. Morocco’s Green Investment Plan is spending $11.5 billion on solar and wind energy programs over a period of 10 years. By 2030, Morocco aims to cover 52% of its energy needs with renewables.

Morocco is the only North African country that has virtually no fossil fuel resources. The expansion of renewable capacity will reduce the kingdom’s dependency on imports that reached 91% in 2014. To attract private sector investments in green energies, Morocco has largely stopped fossil fuel subsidies and instead funds the difference between production cost and the selling price of green energy.

Dorothea Richewski, the director of the Heinrich Boll Foundation in Rabat, calls for caution. “This is financed mostly by loans from international finance institutions. As a result, Morocco’s dependency on fossil fuels will be replaced by a financial dependency. In 2015, Morocco’s debt already reached more than 63% of the gross domestic product [GDP].”

Renewable energy infrastructures are earmarked for their positive socio-economic impact. Morocco was ranked among the poorest countries in the Arab world.

But according to Richewski, there are still some lessons to be learned. “There were very high expectations in terms of employment around the development of NOOR I. However, there were fewer jobs created than expected and many were only temporary. Small and medium size businesses were not sufficiently included in the construction of NOOR I, whereas they are key for job creation and local economic development,” he said.

The development of Morocco’s green energy sector is orchestrated by King Mohammed VI, whose fortune was estimated as the fifth largest in Africa in 2015 and is largely due to his majority shareholding of the National Investment Company. This giant founded Nareva Holding, an energy company that aims to become a Moroccan pioneer in renewables. Over the last years, Nareva Holding won numerous national tenders, including for the Tarfaya wind park, Africa’s largest.

Nareva Holding also launched partnerships to develop green energy projects in North and West Africa, including Ghana, Egypt, Cameroun and Senegal. Beside business opportunities, these partnerships offer additional diplomatic leverage at a time when Morocco wishes to rejoin the African Union after 32 years of absence.

Cedric Philibert, a renewable energy senior analyst at the International Energy Agency, told Al-Monitor that he is skeptical whether Moroccan green energy programs can be replicated in sub-Saharan Africa. “Morocco has developed huge energy plants. But in sub-Saharan Africa, it is rather likely that the energetic transition will be more decentralized, with smaller units such as solar cells to charge smartphones or at the village level.”

The development of the Moroccan wind energy program also faces fierce criticism in Western Sahara. The Foum El Oued wind park already operates in this disputed territory. Two additional wind farms are planned over the next years. Erik Hagen, the chair of Western Sahara Resource Watch, told Al-Monitor in this regard, “In just four years, the kingdom plans to produce over a staggering quarter of its renewable energy in Western Sahara.”

Morocco annexed Western Sahara in 1976. After a 15-year long conflict between Morocco and the Polisario Front, Western Sahara’s national liberation organization, a cease-fire came into effect with the promise of a referendum of self-determination in Western Sahara the following year. The International Court of Justice as well as the United Nations are in favor of the referendum. But until today, Morocco failed to organize it while developing economic activity in what it calls its “southern provinces.” According to Hans Corell, a former legal counsel of the United Nations, the natural resources from a “non-self-governing territory” such as Western Sahara can only be used with the agreement and for the benefit of the local population.

Said Mouline, the director general of the Moroccan National Agency for the Development of Renewable Energy and Energy Efficiency, told Al-Monitor that the wind parks close to el-Aaiun, the largest city in Western Sahara, produce electricity for the local population. “This region is being developed according to the rules of sustainable development. This is different from countries that export petrol and do not distribute the benefits to local populations.”

But according to Phosboucraa, a government-owned phosphate mining company, 95% of its energy is produced by the nearby Foum El Oued wind park. Phosphate exports traditionally account for 10% of Morocco’s GDP. In their report published before the COP22, Western Sahara Resource Watch points out that the use of locally produced renewable energies makes the depletion of nonrenewable resources in Western Sahara more profitable by lowering production costs.

Western Sahara Resource Watch also criticizes the German company Siemens for striking a deal with Nareva Holding for the Foum El Oued wind power project. Hagen said, “According to international law, Siemens should consult the local Sahrawi population before entering into deals in this territory.” A Siemens spokesperson told Al-Monitor that the company was a mere supplier and that the delivery of wind turbines to the Foum El Oued site was not in breach of international law.

As the COP22 comes to an end, Western Sahara Resource Watch is questioning Morocco’s reputation as a green energy champion. Hagen added, “Of course, it is important to fight climate change. At the same time, it is very surprising that the UNFCCC [United Nations Framework Convention on Climate Change] — the UN body responsible for the COP22 — does not question these Moroccan projects that take place in a territory over which the UN itself does not recognize Moroccan sovereignty.”

At the COP22, Morocco emerges as an African leader in green energies. But many criticize the political and financial interests that the palace is pursuing through its renewable energy policies. (Al-Monitor 15.11)

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11.7 TURKEY: Turkey’s Emergency Rule Fuels Brain Drain

Sibel Hurtas posted on 21 November in Al-Monitor that Turkey is losing precious human capital, as many educated Turks are migrating to the West, scared off by ferocious crackdowns since the July coup attempt.

The aftermath of the 15 July coup attempt has sparked a migration flurry among educated Turks amid crackdowns on media freedoms and free speech, arbitrary restrictions on property and work rights, and growing talk of a looming economic crisis and even a civil war. Many of those leaving the country are academics, expelled overnight from universities via legislative decrees, journalists out of work and under the threat of imprisonment, and members of non-Muslim minorities who feel increasingly insecure.

Since the state of emergency was declared soon after the botched coup, 3,500 academics, one-fifth of them professors, have been expelled from universities across the country through two legislative decrees issued by the government. They include scores of scholars who had signed a peace declaration in January, urging Ankara to stop the military crackdown in the mainly Kurdish southeast and seek a negotiated settlement to the conflict. The signatories had already faced probes for spreading “terrorist propaganda,” and some were quick to seek safety abroad before things got even worse after the coup attempt.

One of them, currently employed by a university in the United States, told Al-Monitor on condition of anonymity, “I left Turkey because of threats and fear of imprisonment. I’m still afraid despite being so far away. I’m now worried for my colleagues in Turkey and have been having sleepless nights since October. Primary and secondary education in Turkey was already finished, now higher education is finished as well.”

Another signatory of the peace declaration attempted to go abroad after being expelled in the wake of the putsch, but was not that lucky. Fearing unemployment and imprisonment, the academic said she sought help from the Scholars at Risk network and was offered a position at a German university. She was unable to go, however, as she was slapped with a travel ban.

International groups helping at-risk scholars have reported a record surge in applications from Turkey. In a report issued in October, Scholars at Risk warned of the far-reaching implications of Ankara’s crackdown on the academic community, saying, “The government’s actions, beyond the harm done to the individuals targeted, have already harmed the reputation of Turkey’s higher education sector as a reliable partner for research projects, teaching and study exchanges, and international conferences and meetings. If not promptly reversed, these actions risk greater damage by isolating Turkish scholars, students and institutions from the international flow of ideas and talent, further undermining Turkey’s position in the global knowledge economy and its stature in the world more generally. Turkish officials must honor their obligations, including under the constitution, to protect institutional autonomy and academic freedom. They should reverse the actions taken and suspend further actions against Turkey’s higher education institutions and personnel.”

Aysit Tansel, an economics professor at Ankara’s Middle East Technical University who has studied Turkey’s brain drain over the years, said, “Though I have not researched the issue academically in recent times, I hear that [Turkish academics] abroad are unwilling to return and those here want to go.” The expelled academics can hardly find teaching jobs in Turkey now, she said, adding, “They will have to either look for jobs outside academia or go abroad to seek jobs in or outside academia. They have to earn their living somehow. And if they go abroad, the damage will be on Turkey for losing well-educated, qualified people.”

Journalists are another professional group standing out in the migration flurry. More than 100 newspapers, radio stations and television channels have been closed down after the coup attempt, with scores of journalists facing judicial investigations.

Erol Onderoglu, the Turkey representative of Reporters Without Borders, described an unprecedented sense of insecurity gripping journalists of disparate straits. “For the first time in 40 years, journalists and intellectuals of various, even opposite, leanings feel they are all the target of an oppressive government and emergency rule measures,” he told Al-Monitor. “So, [many] seem to have made up their minds or have already realized plans to live and work in exile, having lost hope of reclaiming their jobs or profession in Turkey.”

Turkey’s tiny non-Muslim minorities also seem to be on tenterhooks. According to the head of the Jewish community, Ishak Ibrahimzade, 250 Jews have left Turkey in the wake of the coup attempt. “In the Armenian community, the figure is not believed to have reached that level yet, but, sadly, migration remains high on the [community’s] agenda,” the Armenian-Turkish newspaper Agos wrote last month.

Brain drain has plagued Turkey since the 1960s. Academic studies indicate that the migration of qualified Turks was triggered by political crises and low wages, and continued throughout the years, though with a lesser intensity. Today, however, the brain drain is coming from people targeted by government policies, with many going abroad after failing to even find a job. This shows the brain drain is no longer an economic phenomenon but an increasingly politicized one. This, in turn, suggests that well-educated and qualified Turks will continue to look for better futures abroad, given the bleak prospects for the country.

In his remarks to Al-Monitor, the Turkish academic in the United States said he wished to return to Turkey “but not to the current one.” The scholar who made an unsuccessful attempt to migrate said she did so reluctantly. In other words, migration is not a voluntary option. Thus, the brain drain is likely to stop if the government restores constitutional rights and freedoms and lifts the state of emergency with all its extraordinary practices. Turkey, which was already lagging behind the West both in media freedoms and overall academic standards, should give itself a chance to avoid falling further behind.

Sibel Hurtas is an award-winning Turkish journalist who focuses on human rights and judicial and legal affairs. Her career includes 15 years as a reporter for the national newspapers Evrensel, Taraf, Sabah and HaberTurk and the ANKA news agency. She won the Metin Goktepe Journalism Award and the Musa Anter Journalism Award in 2004 and the Turkish Journalists Association’s Merit Award in 2005. In 2013, she published a book on the murders of Christians in Turkey. Her articles on minorities and unresolved killings appear on the Faili Belli human rights blog. (Al-Monitor 21.11)

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11.8 TURKEY: AKP Bill to Pardon Child Rapists Who Marry Their Victims

Amberin Zaman posted on 21 November in Al-Monitor that Turks are furious over a proposed law that would commute the sentences of men who have sex with minors if they end up marrying the girls, but Turkey’s ruling party has the simple majority it needs to push the law, which it claims is intended to address legal issues surrounding child marriage, through parliament.

Defying a nationwide outcry, Turkey’s ruling Islamist Justice and Development Party (AKP) appears bent on ramming a bill through parliament that would pardon child rapists if a perpetrator marries his victim. AKP parliamentary whip Mustafa Elitas refused to withdraw the measure, which is likely to be approved in a second round of voting on 22 November. Scrapping the bill “is out of the question,” he said.

A simple majority, which the AKP commands, will suffice for its adoption.

Many see pardoning men who engage in sex with little girls as part of the AKP’s broader agenda of imposing what human rights lawyer Erdal Dogan described to Al-Monitor as “a medieval lifestyle governed by Islamic laws.”

Elitas claimed that his party would consider changes to the bill proposed by the main opposition secular Republican People’s Party (CHP). Deputy Prime Minister Numan Kurtulmus echoed the offer. But CHP whip Ozgur Ozel said no one from the government had contacted his party with regard to the affair thus far. He further asserted that the bill, if passed as is, offers “a ticket to freedom” for “17,000 abusers.” Women’s and other rights groups, including some prominent pro-Islamic female essayists, have reacted with fury to the proposal, saying it will give free rein to pedophiles. “It will in the long term transform the lives of young girls into hell,” wrote Fatma Barbarasoglu in Yeni Safak.

On 20 November, thousands of people including women and children marched against the bill in the determinedly pro-secular Kadikoy district in Istanbul. A day earlier, the United Nations Children’s Fund said it was “deeply concerned” by the legislation. It may be no coincidence that numerous women’s organizations that had been campaigning against child marriage were among some 370 associations whose activities were shut down under an emergency law decree.

Rights activist Nurcan Cetinbas ran one of the banned outfits in the mainly Kurdish city of Mus in southeast Turkey. She told online news portal Diken that field studies suggested that the proportion of marriages with minors in Mus was around 60% in the city center and as high as 70% in outlying boroughs. Cetinbas said that contrary to government claims that the law is compatible with Turkey’s “cultural fiber,” all it will do is send a signal to child rapists “to carry on.”

The government is defending the move as an attempt to smooth out legal wrinkles arising from the issue of child marriage, which is woefully widespread in Turkey. Former Turkish President Abdullah Gul famously married his wife Hayrunnisa when she was 15 and he 30.

The AKP insists that the amnesty will apply only to those who had intimate relations with girls aged 15 or under without use of “force, threat or any other restriction on consent.” Men convicted in such cases between 2005, when a similar law was scrapped, and November this year, would be eligible to have their sentences commuted if they married their victims.

Dogan speculated that the bill might have been devised in part to address the ballooning allegations of sexual abuse from Syrian child refugees who are employed as household help. In May, English-language Hurriyet Daily News reported that a total of 30 Syrian refugees aged between 8 and 12 had been sexually assaulted by a cleaner in the Nizip refugee camp on the Syrian border. The offender was sentenced to a total of 289 years in prison. All of his victims were boys.

Amberin Zaman is a journalist who has covered Turkey, the Kurds and Armenia for The Washington Post, The Daily Telegraph, The Los Angeles Times and the Voice of America. She served as The Economist’s Turkey correspondent between 1999 and 2016. She was a columnist for the liberal daily Taraf and the mainstream daily Haberturk before switching to the independent Turkish online news portal Diken in 2015. She is currently a public policy scholar at The Woodrow Wilson Center in Washington, DC, where she is focusing on Kurdish issues. (Al-Monitor 21.11)

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Fortnightly, 30 November 2016

Fortnightly, 30 November 2016

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