Fortnightly, March 25th 2015

TOP STORIES

• Moona – a Space for Change
• Israel & Italy Set Up Joint Research Laboratories
• Delaware Excels at Arab Lab
• Jordan & Russia to Sign Nuclear Deal Before End of March
• Egypt, Ethiopia & Sudan to Resolve Nile Dam Dispute
• 85% of Moroccans Want English as First Foreign Language

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Prime Minister Netanyahu & the Likud Win National Elections
1.2 Benjamin Netanyahu to Form New Government
1.3 US Does Not Renew Emergency Oil Supply Pact with Israel
1.4 Chinese Company Awarded Tender to Operate New Haifa Port

2: ISRAEL MARKET & BUSINESS NEWS

2.1 Moona – a Space for Change
2.2 Tamar Partners Sign $1.2 Billion Gas Deal with Egypt’s Dolphinus Holdings
2.3 Palestinians Cancel $1.2 Billion Leviathan Gas Deal
2.4 DocuSign Acquires Israel’s ARX Digital Signatures
2.5 ReVera to Be Acquired by Nova Measuring Instruments
2.6 SHL Telemedicine Signs Distribution Agreement for the smartheart in Japan
2.7 Solebit LABS Raises $2 Million from Glilot Capital Partners
2.8 Playbuzz Raises $16 Million

3: REGIONAL PRIVATE SECTOR NEWS

3.1 Delaware Excels at Arab Lab
3.2 French Firm Wins Tech Deal for Qatar Light Rail System
3.3 MATRIXX Software Expands into Middle East with New Office in Dubai
3.4 UAE Registered 2,200 New Café Licenses in Two Years
3.5 GE to Invest $200 Million in New Multi-Modal Facility in Egypt
3.6 Symphony Teleca Opens Branch in Morocco

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 UAE’s Masdar Signs Partnership for Huge Moroccan Solar Roll-Out
4.2 Egypt Solar Industry Association (Egypt-SIA) Releases Solar Report

5: ARAB STATE DEVELOPMENTS

5.1 Lebanon’s Balance of Payments Deficit Widened to $1.41 Billion in 2014
5.2 Lebanese Tourist Numbers See February Rise
5.3 Beirut Ranks 181st in World in Quality of Living
5.4 Number of Lebanese Registered Cars Dropped 7.86% by February
5.5 Jordan & Russia to Sign Nuclear Deal Before End of March

♦♦Arabian Gulf

5.6 Value of Middle East Oil Exports Expected to Slump $300 Billion in 2015
5.7 Kuwait to Launch New Expat Crackdown in April
5.8 Bahrain’s GDP Growth Slows to 4% in Fourth Quarter of 2014
5.9 US & UAE Agree To Move Forward On Space Cooperation
5.10 More Than 500,000 Laborers Working in Dubai
5.11 Dubai’s Non-Oil Foreign Trade Rises To $362.3 Billion in 2014
5.12 Saudi Arabia’s Mining Revenues Hit SR 18 Billion
5.13 Saudi Arabia Deports 300,000 Expats in 5 Months
5.14 World Bank Halts Yemen Activities Over Security Fears

♦♦North Africa

5.15 Egypt, Ethiopia & Sudan to Resolve Nile Dam Dispute
5.16 Arabian Gulf Allies Pledge $12 Billion to Support Egypt at Summit
5.17 Egypt Targeting 4.5 – 5% Growth in 2015/16
5.18 Egypt’s Trade Deficit Rises to LE21.88 Billion in December 2014
5.19 BP Signs $12 Billion Energy Deal in Egypt
5.20 Egypt to Require Pre-Obtained Visas for Foreigners of Any Nationality
5.21 Morocco’s Railway Development Strategy to Cost $20 Billion
5.22 Remittances of Moroccans Living Abroad Reach MAD 9.4 Billion in February
5.23 Phosphates Help Reduce Morocco’s Trade Deficit by 37.2%
5.24 Moroccan Smartphone Sales up 42% in 2014

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Turkey’s Unemployment Rate Increases to a 4 Year High
6.2 5 Million Turks Unable To Receive Health Services Over Debts
6.3 Turkey’s First Nuclear Plant Delayed, ‘Not Ready Before 2022’

7: GENERAL NEWS AND INTEREST

♦♦ISRAEL:

7.1 Passover Observance Will Begin on 3 April
7.2 Israel Changes to Summertime on 27 March
7.3 Dionne Warwick Coming to Israel in May

♦♦REGIONAL:

7.4 Jordan to Change to Summertime on 26 March
7.5 Cancer Second Most Common Cause of Death in Jordan
7.6 Egypt Unveils Plans for New Administrative Capital
7.7 85% of Moroccans Want English as First Foreign Language

8: ISRAEL LIFE SCIENCE NEWS

8.1 Israel Brain Technologies Launches “Brainnovations” Startup Launchpad
8.2 One World Cannabis Signs Agreement with Sheba Academic Medical Center
8.3 Evogene First Collaboration with Leading Food Company for Improving Crop Productivity
8.4 Ignyta Acquires Four Oncology R&D Assets from Teva
8.5 Teva’s TEV-48125 Demonstrates Treatment Concept After a Single Dose
8.6 Kamada Awarded European Orphan Drug Designation for Its Alpha-1 Antitrypsin
8.7 ISA Scientific, Yissum, Hadasit & Kennedy Trust Collaborate on Cannabidiol Treatment
8.8 Alma Lasers Releases Soprano ICE Multi-Platform Hair Removal System
8.9 Vectorious Medical Technologies Closes $5 Million Financing Round

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 RADWIN’s 5000 JET PtMP Features a Smart Beamforming Antenna
9.2 Fortis 4G by Magal Receives the Seguritecnia Prize for Spain
9.3 NICE & BoomeRing Integrate Mobile Recording Solution for Regulatory Compliance
9.4 USMC Awards Elbit Contract for the Common Laser Range Finder – Integrated Capability

10: ISRAEL ECONOMIC STATISTICS

10.1 Israel’s Deflation Continues as CPI Drops by 0.7% in February
10.2 Bank of Israel Report Reveals Israeli Public Pays NIS 7.4 Billion for Health Care
10.3 Israelis Bought 2.85 Million Smartphones in 2014
10.4 Operation Protective Edge Cost Israel’s GDP NIS 3.5 Billion
10.5 Petah Tikva is Israel’s Top Export City

11: IN DEPTH

11.1 LEBANON: Ambitious Solar Project Promises More Electricity for Lebanon
11.2 JORDAN: IMF Mission Reaches Staff-Level Agreement on Sixth Review
11.3 IRAQ: IMF Staff Concludes the 2015 Article IV Mission for Iraq
11.4 EGYPT: Egypt, Sudan & Ethiopia Approach Resolution of Nile Dam Crisis
11.5 TURKEY: Turkey and the KRG: An Undeclared Economic Commonwealth
11.6 GREECE: ‘B-/B’ Ratings Remain On CreditWatch Negative
11.7 GREECE: SYRIZA Trapped as April Deadline Approaches

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Prime Minister Netanyahu & the Likud Win National Polls

Contrary to the poll predictions, the Likud Party surged ahead, securing a dramatic electoral victory. Prime Minister Benjamin Netanyahu has been asked to form a coalition government with center, right wing and religious parties, as well as the Kulanu Party. Netanyahu’s Likud Party won 30 seats, while the Zionist Union held 24.

Voter turnout in this election reached 71.8%, the highest since 1999. According to the Israel Democracy Institute, due to the new law that increased the electoral threshold parties must pass to enter the Knesset, the new parliament will contain the fewest number of parties (10) since 1992. There will also be 38 first time MKs sworn in, from a wide variety of parties.

There will be a record number of female members of Knesset (29) and an increase in the number of Arab members of Knesset, including a doubling of their number in other political parties. The Joint List party, a combination of four Arab political parties that united to pass the electoral threshold, became the 3rd largest party in the Knesset, with 14 seats. There will be only one Ethiopian-Israeli in the 20th Knesset – the Likud’s Abraham Naguise.

The final tally had Likud at 30 seats, Zionist Union with 24, the Joint List 13, Yesh Atid 11, Kulanu 10, Bayit Yehudi 8, Shas 7, Yisrael Beytenu 6, UTJ 6 and Meretz 5. The electoral threshold rose to 136,808 votes this election, with 33,482 votes equal to one mandate. There was a 72.3% turnout, with 4,253,336 out of 5,878,362 eligible voters turning up at the polls, a boost from 2013’s turnout of 67.7%.

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1.2 Benjamin Netanyahu to Form New Government

Prime Minister Benjamin Netanyahu will form the next government. After Kulanu and Israel Beitenu told president Reuven Rivlin that they recommend Netanyahu be asked to form the next government, the prime minister now has the backing of 67 MKs in the 120 seat Knesset. In addition to his 30 strong Likud party, Netanyahu also has the support of Shas, United Torah Judaism and Habayit Hayehudi.

The president must consult with the representatives of all the parties before choosing one of the party leaders — the one most likely to be able to assemble a stable coalition — and tasking them with building the government and serving as prime minister. With Netanyahu’s Likud party having won a plurality of Knesset seats, the consultations are not much more than a formality before Rivlin assigns him the task. On 25 March, after the official election results are posted, Rivlin will give Prime Minister Netanyahu 28 days to assemble a coalition. Shortly afterward, the coalition negotiations will officially begin. (Ynet 24.03)

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1.3 US Does Not Renew Emergency Oil Supply Pact with Israel

The US has not renewed a historic agreement under which it guaranteed a supply of oil to Israel in emergencies, that is, instances in which Israel might be cut off from its regular commercial sources of oil because of war or closure of sea lanes. The agreement expired in November 2014 and since then the US administration has done nothing to renew it. Globes reported that it was not clear whether this was a deliberate step by the administration or a matter of bureaucratic inertia in Washington.

The agreement was first signed in 1975 during the Ford administration, two years after the Yom Kippur War and following the second disengagement agreement between Israel and Egypt in September 1975, under which Israel agreed to withdraw from the Egyptian oil fields in Sinai. The agreement by the US to guarantee Israel’s oil supply in emergencies was one of the most important of the incentives that motivated Israel to give up the oil fields.

In 1979, during the Carter administration, Israel and Egypt signed the Camp David Agreements, which were accompanied by two agreements between the US and Israel in the format of the 1975 agreement. In these agreements, the US gave Israel guarantees that it would have access to American oil if it was unable to supply the demand of its internal energy market because of war constraints. The agreements even stipulated that the US would assist in transporting oil to Israel if Israel was unable to procure oil tankers on the open market. The two agreements were eventually consolidated into one document. The agreement was set to last for fifteen years and was supposed to have expired on 25 September 1994. At that point, the Clinton administration extended the agreement for ten years and in 2004 it was extended for a further ten years. Israel has never invoked the agreement, but Israel sources say that its importance lies in its very existence. (Globes 16.03)

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1.4 Chinese Company Awarded Tender to Operate New Haifa Port

Shanghai International Port (Group) Co. (SIPG) has been awarded the Israel government tender to operate the new port being built in Haifa for 25 years. The new port is planned to commence operations in 2021. SIPG was the only company that bid to operate the new Haifa port. The government must now consider two bids to operate the new Ashdod port from Germany’s Eurogate and Holland’s TIL. (Globes 23.05)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 Moona – a Space for Change

Launched in January 2013, Moona – a space for change is a collaborative space that enables the people of the Galilee to dream and achieve technological and entrepreneurship and innovation, which believe will help the region reach a social and economic breakthrough. In September 2014, the space and technology makerspace opened in the Arab Israeli city of Majd Al Kurum in the Galilee. The space is open for children, youth, students, entrepreneurs and other members of the community residents of the Western Galilee, which together can work, create and operate 3D printers develop drones and build robots. So far, it has attracted about 100 high school students – roughly a 50-50 split between Jewish and Muslim teens – for weekly courses in robotics, drones, 3D printing, electronics and other technologies related to outer-space exploration. Families from the area also are welcome at Moona. Moona means wish in Arabic and sounds like moon in English, while in Hebrew emoona means faith. (Various 22.3)

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2.2 Tamar Partners Sign $1.2 Billion Gas Deal with Egypt’s Dolphinus Holdings

The Tamar partners have signed a natural gas export deal with Egyptian company Dolphinus Holdings. The deal worth $1.2 billion is for 5 billion cubic meters (BCM) of gas over three years. The supply of gas to Dolphinus will be based on the amount of surplus gas available to the Tamar partners. In other words there is a clause in the contract allowing gas supply to be interrupted at short notice. The fact that the Egyptian customer has agreed to this clause is an indication of the shortfall of gas in the country. The agreement also allows the Tamar partners to increase the amount of gas sold to Dolphinus Holdings according to the level of demand in the Egyptian market.

This is the first such agreement signed with Egypt and the first export deal signed by the Tamar partners. The Tamar partners have also signed a letter of intent to sell 70 BCM of gas to Union Fenosa’s liquid petroleum gas installation in Egypt and a small deal to sell 1.8 BCM to Jordan’s Arab Potash and Bromine Company. However, due to the regulatory uncertainty in Israel’s gas sector, these deals have been suspended for the time being.

The Tamar field gas will be transported to Egypt via Israel Natural Gas Lines pipelines to Ashkelon, and from there to Egypt via the EMG (East Mediterranean Gas Company) pipeline that formerly served to transport gas from Egypt to Israel. The pipeline is constructed to transport gas in one direction only, but it is estimated that it can be converted to be bi-directional at an investment of some $10 million. Texas-based Noble Energy is the field’s operator. (Tamar 18.03)

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2.3 Palestinians Cancel $1.2 Billion Leviathan Gas Deal

The decision by Israel Antitrust Authority head David Gilo to break up the monopoly ownership of both the Tamar and Leviathan fields is exacting a price. Leviathan partners Avner Oil and Gas LP, Delek Drilling Limited Partnership and Ratio Oil Exploration reported on 11 March that the Palestine Power Generation Co. (PPGC) has cancelled its $1.2 billion contract to buy gas from Leviathan. In January 2014, PPGC signed an agreement to buy 4.75 billion cubic meters of gas over 20 years. The Leviathan partners explicitly stated that the cancellation of the contract was because the Israel Antitrust Authority had failed to grant approvals, delays in approvals for the development of the Leviathan field, and lack of other regulatory approvals. (Globes 11.03)

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2.4 DocuSign Acquires Israel’s ARX Digital Signatures

San Francisco’s DocuSign has announced its acquisition of Israel’s Algorithmic Research, (ARX) Digital Signatures. No financial details about the deal were disclosed but sources estimate DocuSign is paying $30-50 million. The acquisition builds on a three year business partnership between DocuSign and ARX, bringing together ARX’s CoSign digital signature technology with DocuSign’s Digital Transaction Management (DTM) platform, to empower customers to transact business with full trust and confidence anywhere in the world. DocuSign’s acquisition of ARX further accelerates the company’s worldwide expansion and broadens The DocuSign Global Trust Network.

Back in 1997, ARX was sold to Cylink for $83 million. But Cylink did not survive the 2000 bursting of the dot.com bubble and fell back into the hands of its management and employees in a buyout. Since then the company has focused on digital signature solutions.

Petah Tikva’s ARX, with its CoSign line of products, offers important compliance certifications critical for customers in Europe, the Americas and Asia, including NIST’s FIPS 140-2 Level 3 and Common Criteria EAL4+ certifications. CoSign is used by millions of users globally to transact business in the most highly regulated industries, including life sciences, government and public sector, financial services, healthcare and engineering. (DocuSign 11.03)

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2.5 ReVera to Be Acquired by Nova Measuring Instruments

Santa Clara, California’s ReVera Incorporated, the materials metrology company, will be acquired by Rehovot’s Nova Measuring Instruments subject to the terms of a definitive agreement signed today. Nova is a leading innovator and a key provider of optical metrology solutions for advanced process control used in semiconductor manufacturing. ReVera will be acquired for $46.5 million in an all cash deal with an expected close date in mid-April, 2015. ReVera is a leading provider of materials metrology solutions for advanced semiconductor manufacturing. ReVera’s products focus on process control of composition and film thickness for complex, multi-layer film stacks in the most critical semiconductor manufacturing steps.

Nova Measuring Instrument delivers continuous innovation by providing advanced optical metrology solutions for the semiconductor manufacturing industry. Deployed with the world’s largest integrated-circuit manufacturers, Nova’s products deliver state-of-the-art, high-performance metrology solutions for effective process control throughout the semiconductor fabrication lifecycle. Nova’s product portfolio, which combines high-precision hardware and cutting-edge software, supports the development and production of the most advanced devices in today’s high-end semiconductor market. (ReVera 12.03)

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2.6 SHL Telemedicine Signs Distribution Agreement for the smartheart in Japan

SHL Telemedicine signed a distribution agreement for its innovative smartheart device with USCI Holdings of Japan. USCI shall immediately order a sizable amount of smartheart devices already this quarter with a target of buying at least 1,000 smarthearts until the end of 2016. smartheart is the first and only personal mobile 12-lead ECG device on the market that enables the detection of heart attacks. USCI Holdings will target the professional healthcare community, i.e. physicians and general practitioners. With smartheart and a smartphone or tablet they can perform a full hospital grade ECG and receive from SHL’s global telemedicine center an ECG interpretation.

Tel Aviv’s SHL Telemedicine is engaged in developing and marketing personal telemedicine systems and the provision of medical call center services, with a focus on cardiovascular and related diseases, to end users and to the healthcare community. SHL Telemedicine offers its services and personal telemedicine devices to subscribers utilizing telephonic and internet communication technology. (SHL 11.03)

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2.7 Solebit LABS Raises $2 Million from Glilot Capital Partners

Herzliya Pituah’s Solebit LABS, a developer of cyber-security solutions that protect networks from zero-day attacks and APTs at the delivery phase, announced a $2 million funding round from Glilot Capital Partners. Solebit LABS was founded in 2014 by entrepreneurs with years of experience in defensive and offensive cyber-security approaches and all graduates of elite technology units in the Israel Defense Forces. The company’s solutions protect large enterprises against Advanced Persistent Threats (APTs), which continue to grow at an exponential pace. According to a recent study by Information Security Media Group, at least 38% of enterprises lack sufficient technology solutions to detect or mitigate APTs. Solebit’s solution does not require the deployment of agents in the organization, nor does it require cyber-experts to implement the system. Administrators can define areas and assets in the network that are able to send or receive code. The funding round will enable Solebit to accelerate its product development and ramp up its sales and marketing efforts. (Solebit LABS 23.03)

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2.8 Playbuzz Raises $16 Million

Playbuzz, whose platform enables the distribution of content on social media, announced it raised $16 million in a financing round led by venture capital fund 83North. Additional funds came from Saban Capital, the investment arm of media mogul Haim Saban, as well as existing investors Carmel Ventures and FirstTime Ventures. Playbuzz content is seen by over 80 million monthly unique visitors and has ranked the #1 most shared publisher on Facebook for four consecutive months. The new investment will be used to expand the company’s operations and develop the variety of formats available on the platform. Playbuzz has thousands of publishers and content creators who author, embed and distribute content.

Tel Aviv’s Playbuzz is a free authoring platform that enables publishers, bloggers and brands to engage users, increase web traffic and reach an audience of millions via Playful content. Over 5,000 websites and mobile app. publishers use the Playbuzz platform to create, distribute and embed quizzes, listicles, polls and more, exponentially increasing their content reach, user engagement and viral distribution. (Playbuzz 24.03)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 Delaware Excels at Arab Lab

The State of Delaware led a four company delegation to the most recent edition of Arab Lab, taking place on 23 – 26 March in Dubai, UAE. Such products as HPLC columns, GC columns, chromatography plates and mobile spectroscopy solutions were offered by the Delaware companies. Visitors included companies not only from the Arabian Gulf, both private and public sector, but also from as far afield as the UK, Russia, Serbia, Nigeria, Niger and Swaziland. Delaware’s trade interests in the Middle East are handled by Atid, EDI.

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3.2 French Firm Wins Tech Deal for Qatar Light Rail System

France-based technology firm Thales signed a contract to deliver an integrated supervision, telecommunications, security and automatic fare collection system for the Lusail Light Rail Transit System in Qatar. The company has been hired by QDVC, a construction firm jointly owned by Qatari Diar and VINCI Construction Grands Projets. The new tramway will consist of four lines, covering 32km, and serving 37 stations. It will be the backbone of public transportation for the new city which is located about 23km north of Doha. Spread over 35 sq. km., the new city of Lusail will have an estimated population of 260,000 people with public transport expected to see up to 450,000 travelers per day.

Thales has already delivered fully integrated solutions for the world’s longest driverless metro and ETCS main lines, Dubai’s urban transport network and Saudi Arabia’s North South Railway, respectively. It has also delivered an integrated signaling and supervision solution for the Mecca metro. QDVC recently signed a contract for the last phase of the LRT project development, having already carried out the design and excavation phase of this project. The Lusail Light Rail Transit is part of Qatar Railways Company Development Program including the Doha Metro project and the Long Distance Passenger & Freight rail network. (AB 11.03)

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3.3 MATRIXX Software Expands into Middle East with New Office in Dubai

Mountain View, California’s MATRIXX Software announced the opening of a new office in Dubai to support business development in the Middle East region. The office will serve Communication Service Providers (CSPs) based in countries in the Middle East, including UAE, Saudi Arabia, Egypt, Qatar, Bahrain and Turkey. CSPs in this region are experiencing an explosion in mobile data, driven by the proliferation of apps, services and various smart devices. Data revenue is growing and will soon surpass the combined revenue of voice and SMS. In order to capitalize on this trend, CSPs are exploring new business models, capabilities, and services that help them monetize 4G investments, and new ways of delivering those services using customer self-service capabilities direct from the device. Leading CSPs will use these business models and capabilities to drive their transition towards becoming Digital Service Providers.

Through patented real-time technology, MATRIXX enables service providers to innovate and profit from the transition to digital. The MATRIXX platform combines real-time charging, policy and analytics enablement to offer a differentiated customer experience. MATRIXX customers include tier one CSPs such as Telstra and Swisscom as well as emerging service providers and MVNOS. MATRIXX offers real-time enablement for Digital Services through convergent policy, charging, and analytics technologies specifically designed to meet the huge market demand for data, new apps and services, 4G network capabilities and Digital business models. (MATRIXX 17.03)

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3.4 UAE Registered 2,200 New Café Licenses in Two Years

The UAE has registered nearly 2,200 new café licenses in the last two years, while more than 90 in-shop and large-scale coffee roasters are planning to open for business in the next 24 months. The country’s traditional coffee culture and an expanding tea market complement increasing investment in the café, coffee and tea businesses estimated to be worth between $350 million and $400 million. (AB 12.03)

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3.5 GE to Invest $200 Million in New Multi-Modal Facility in Egypt

GE is investing in a new $200 million multimodal manufacturing, engineering, services and training center in Egypt which will focus on various industries including power generation, renewables, water, oil & gas, aviation and rail transportation. The new multi-modal manufacturing and training facility in Suez will serve Egypt and the region. This first-of-its-kind facility in the region will be built on the concept of flexibility, allowing for the manufacturing of a diverse set of products and catering to GE’s broad range of businesses. It will work on the principle of a ‘Shared Center of Excellence’ on process, capability and human capital aimed at driving economies of scale. It will create approximately 500 jobs for skilled Egyptian professionals in the next three to five years. The Center will provide extensive and hands-on technical, operational and leadership training programs for Egyptian professionals as well as extend advisory support to the participants who go on to build SMEs that add to the Egyptian supply chain. The details of the new initiative were announced on the sidelines of the Egypt Economic Development Conference. (GE 13.03)

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3.6 Symphony Teleca Opens Branch in Morocco

Mountain View, California’s Symphony Teleca Corporation (STC), a global innovation and development services company, announced a new location in Morocco to support continued growth of the company’s global business. Leveraging the wide engineering talent pool in the area and its proximity to key customer locations across Europe, the new site gives STC a strong competitive advantage. The Morocco site provides customers with software product engineering across the lifecycle from development to sustaining engineering. Its focus is on a combination of retail and healthcare software companies, counting Symphony EYC, Maincare Solutions, and Cdiscount.com as customers. Leveraging its proximity to the EU and the team’s native French and Spanish speaking capabilities, the Morocco office further supports Symphony Teleca’s global customer base in bringing the most innovative products to market. The new location has 50 employees, with the plan to grow to 150 by 2016. Implementing a rigorous training program, the site will recruit top engineering talent from local universities to build a strong employee pipeline.

Symphony Teleca is a new age technology services company, helping customers innovate at the convergence of smart devices, software, cloud and data. (STC 16.03)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 UAE’s Masdar Signs Partnership for Huge Moroccan Solar Roll-Out

UAE-based clean energy firm Masdar and Morocco’s Office National de l’Electricité et de l’Eau Potable (ONEE) have signed a partnership to design, supply and install 17,670 solar home systems across 940 villages in the North African country. When complete, the solar homes, along with broader electrification initiatives, will result in 99% of rural Morocco having access to energy by the end of 2017. Dr Sultan Ahmad Al Jaber, UAE minister of state and chairman of Masdar, and Ali Fassi-Fihri, director general of ONEE, signed the agreement in Casablanca, Morocco. The project is funded through a grant by the Abu Dhabi government, the statement added.

Rural electrification through Solar Home Systems is part of a program launched by the Moroccan Government in 1996, which allowed access by connecting to the national grid more than 12 million people and equipped 51,559 homes with solar systems. The Moroccan government is committed to securing 42% of nation’s energy from renewable sources by 2020. The solar home systems are being delivered by Masdar Special Projects – a division of Masdar Clean Energy. Masdar and ONEE will work closely to design, supply, install and commission the project while for an initial two-year period, Masdar will provide maintenance and operational training, a responsibility which ONEE will take over and maintain. Each solar home system consists of 290-watt solar panels, which charge two batteries with sufficient storage capacity for three days. (AB 21.03)

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4.2 Egypt Solar Industry Association (Egypt-SIA) Releases Solar Report

Egypt has captured the headlines and attention of the solar industry the last several weeks. With 2.3 GW of power to be generated by photovoltaic energy in the next couple of years, the world is taking notice; major international players are coming to Egypt, forming key relations with local enterprises to make this ambitious goal a reality.

The Egyptian government recently concluded the international Economic Development Conference in Sharm el-Sheikh with hopes of attracting $60 billion dollars in foreign direct investment, including billions for renewable energy. As a result, there has been a wave of announcements from the solar industry declaring gigawatts of development and billions of dollars in investment, not only in PV power plants, but also in manufacturing facilities, research and development, and training. Egypt’s Ministry of Electricity and Renewable Energy has already begun to establish favorable policies and a regulatory framework to help make solar energy a true alternate large-scale source of Egypt’s energy mix. (Egypt-SIA 24.03)

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5: ARAB STATE DEVELOPMENTS

5.1 Lebanon’s Balance of Payments Deficit Widened to $1.41 Billion in 2014

Lebanon’s Balance of Payments (BoP) displayed a $1.41b deficit compared to a smaller deficit of $1.13B in 2013, despite the improvement in the current account, BOP’s largest constituent. Hence, the higher deficit is probably due to worsening capital and financial accounts. Net foreign assets (NFAs) of commercial banks narrowed $5.22b, while that of the Central Bank (BdL) grew by $3.82b. In December alone, the BoP registered a deficit of $116m compared to a surplus of $534m in the same month of 2013. Likewise, BoP deficit widened in January 2015 to $280m, compared to a deficit of $31.3m in the same month of 2014. (Various 15.03)

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5.2 Lebanese Tourist Numbers See February Rise

The number of tourists coming to Lebanon in February 2015 surged by 18.4% compared to the same month last year, as statistics also showed a significant rise in the number of visiting Saudi nationals, Tourism Minister Pharaon said 16 March. Citing figures released by the Tourism Ministry, Pharaon attributed the surge in the number of visitors to the relative stability of the security situation and the successful skiing season in the mountains. Thousands of tourists and ski enthusiasts flocked to Lebanon’s mountain slopes in the last three months, largely thanks to the heavy snow that fell across many parts of the country.

Over the past three years, tourism endured a big setback due to the spillover of the Syrian war, the political standoff and above all the reluctance of Arabs to visit Lebanon in light of security developments. Tourism is one of the main sources of revenue for Lebanon and provides a key injection of hard currency into the market. Lebanon has relied heavily on Gulf Arab nationals to fill the hotel rooms and restaurants in Beirut Central District and mountain resorts.

According to the Tourism Ministry, the number of tourists coming to Lebanon in February reached 85,075 compared to 71,872 in the same month of last year. The number of Arab tourists stood at 31,191 in February 2015 compared to 26,407 in the same month of last year, an increase of 18.1%. The ministry said Arab tourists represented 36.7% of total visitors in February. The number of Arab tourists nevertheless is still far lower than the figures achieved in 2008 and 2009, which were some of the best tourism seasons in Lebanon in many decades. As for European tourists, they represented 33% of the total visitors coming to Lebanon in February. Tourists from the American continent represented 12.7% of the arrivals to Lebanon in the month of February. (TDS 17.03)

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5.3 Beirut Ranks 181st in World in Quality of Living

Beirut’s quality of living ranked in 181st place globally and 15th in the Middle East and North Africa, according to the 2015 Mercer Consulting survey. The survey covers living standards in 230 cities worldwide and 24 cities in the region. The Lebanese capital ranked in 49th place among 58 cities in upper middle income countries included in the 2015 survey. Based on the 220 cities that were included in both the 2010 and 2015 surveys, Beirut came in 171st place globally in 2015, similar to its rank in the 2010 survey, as reported by Byblos Bank’s Lebanon this Week. Beirut was among 30 cities whose rank remained unchanged between 2010 and 2015, while the rank of 79 cities declined and that of 111 cities improved. The study evaluates the cities on the basis of 39 key quality-of-living determinants grouped in 10 categories that include political, economic and sociocultural factors, in addition to health care & sanitation, schools & education, public services & transportation, recreation, consumer goods, housing and the natural environment. (TDS 16.03)

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5.4 Number of Lebanese Registered Cars Dropped 7.86% by February

According to the Association of Lebanese Car Importers, the number of newly registered commercial and passenger cars during the first 2 months of 2015 dropped 7.86% year-on-year (y-o-y) to 4,889 cars. This was triggered by the 7.16% yearly decline in the number of newly registered private cars to 4,577. It is worth mentioning that there has been a change in the popularity of cars based on their country of origin, due to the decline in oil prices. For example, Japanese cars were the most demanded cars in Lebanon in the first 2 months, with their share increasing from 32.96% in 2014, to 39.02% in 2015. Meanwhile Korean cars lost some of their Lebanese market share, going down from 41.81% to 30.48% in 2015. European cars maintained their rank, however with a higher market share of 24.62%, compared to 19.01% in 2014. Likewise, the number of commercial cars decreased 16.76% to 313 cars by February 2015.

By brands, Kia held the largest share of 17.46% in the total of newly registered passenger cars, followed by 15.62% for Toyota. Nissan and Hyundai switched rankings, as Hyundai grasped 13% of newly registered passenger cars, while Nissan held 11.82%. In terms of sales per importer, Natco acquired the biggest bulk, with a 16.34%, followed by BUMC (15.52%), Century Motors (12.46%) and RymCo (12.35%).

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5.5 Jordan & Russia to Sign Nuclear Deal Before End of March

Jordan and Russia will sign an intergovernmental agreement before the end of March in which the two sides stress commitment to supporting the country’s first nuclear power plant, according to Jordan Atomic Energy Commission (JAEC) Chairman Toukan. The agreement, which will be signed in Amman, represents the legal and political framework between the governments of the two countries and highlights their support of the plan, which entails building two nuclear reactors with a total capacity of 2,000 megawatts (MW) and at a total cost of $10 billion. Under the agreement, Jordan will have the option to return nuclear fuel waste to Russia, said Toukan at a meeting with reporters last week, adding that the age of the reactor is 60 years. Russia will provide enriched nuclear fuel for the reactors for the first 10 years after which Jordan has the option of whether to buy nuclear fuel from Russia or any other markets. When signed, the deal will be referred to Lower House for approval. In October 2013, Jordan contracted Russia’s Rosatom to build the country’s first two nuclear reactors that are expected to be operational by 2022.

Jordan, which imports 97% of its energy needs annually at a total cost of 20% of the GDP, has become the third Arab state to pursue peaceful nuclear energy, with the UAE set to build four reactors with a combined 5,600MW capacity by 2020 and Egypt reaffirming in 2013 its plans to establish a 1,000MW reactor by the end of the decade. (Various 21.03)

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►►Arabian Gulf

5.6 Value of Middle East Oil Exports Expected to Slump $300 Billion in 2015

Oil exports in the Middle East and North Africa are expected to decline by $300 billion in 2015 due to the recent slump in prices, according to the Institute of International Finance (IIF). For the GCC, the aggregated current account surplus will shrink from $266 billion in 2014 to about $40 billion in 2015, and the fiscal position will shift from a surplus of 4.6% of GDP to a deficit of 7.4%. It also reduced its growth forecast for the Gulf region by 0.4%age points to 3.4% in 2015. However, outside the oil sector growth will remain strong at 4.5%, only slightly lower than last year, the report said.

It added that non-oil countries in the region will benefit from the fall in oil prices through reduced oil import bills and lower fuel subsidies. In its baseline forecast, the IIF said the price of Brent oil is projected to average $60 per barrel in 2015 and $72 per barrel in 2016. Oil prices could be lower if sanctions on Iranian crude oil exports start to be lifted after end-June of this year and if Libya’s oil production recovers significantly, the report added.

For the short term, the IIF said ample public foreign assets and low debt in the GCC countries will mitigate the adverse impact of low oil prices on economic activity and allow public spending to continue growing, albeit at a slower pace than in recent years. If the oil slump continues beyond the near term, it is expected that most oil exporters will move more seriously towards a fiscal consolidation stance to avoid a significant rundown of foreign assets. Low-priority projects could be postponed or phased over time without impeding longer-term growth prospects or diversification efforts.

The IIF added that banking systems in the GCC, with relatively limited reliance on external funding and comfortable liquidity, should be reasonably resilient to low oil prices in the next couple of years. The expected modest increase in interest rates in the US during H2/15 and further increases in 2016 may tighten financial conditions in the GCC countries because of their exchange rate peg, and eventually lead to some deceleration in the growth of credit to the private sector. (AB 21.03)

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5.7 Kuwait to Launch New Expat Crackdown in April

Kuwait is planning to launch a crackdown on illegal expatriates in early April. More than 100,000 people are expected to be arrested for violations including overstaying their visas, holding the incorrect work permit or not having proper documents. An estimated two-thirds of Kuwait’s total population of more than 3 million is expats. Government ministers have previously said they intended to half the number of foreigners working in the Gulf state by 2023, effectively reducing the number by 100,000 per year. Earlier, the government discussed an amnesty for illegal residents but has not announced one. (Various 16.03)

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5.8 Bahrain’s GDP Growth Slows to 4% in Fourth Quarter of 2014

Bahrain’s real GDP growth slowed to 4% year-on-year in Q4/14, the weakest rate since 3.2% in the first quarter of the year, preliminary data from the Central Informatics Organisation showed. Data showed that GDP growth slowed from 5.1% year-on-year in the previous quarter and from 5.7% during Q2/14. The tiny kingdom of about 1.3 million people is among the financially weakest of the Gulf Arab oil exporters, lacking the huge hydrocarbon and fiscal reserves of its neighbors. Because of the plunge of oil prices since last June, Bahrain’s state budget deficit is expected to balloon to 9.3% of GDP this year from an estimated 5.0% in 2014, according to a Reuters poll of analysts last month. A big question overhanging the economy is what measures Bahrain will take to limit state spending and raise revenues as its budget deficit swells.

On 1 April, the government plans to start raising the price of natural gas for industry. Other economically painful steps are likely to follow, but they are politically sensitive. Ratings agency Fitch said in February that lower oil prices have changed the economic environment for the region’s exporters, with Bahrain and Oman most at risk from the recent price slump. (AB 22.03)

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5.9 US & UAE Agree To Move Forward On Space Cooperation

The United States and the UAE have agreed to work toward greater civil and national security space cooperation after officials from the two countries met recently in Washington, the US State Department has announced. Initial discussions focused on space policy and regulatory developments, long term sustainability of space activities, space security, space exploration, bilateral space science cooperation, weather monitoring, the use of satellite-based applications, and exchanges of best practices. The move comes months after the UAE announced it had entered the space race with a project to send an unmanned probe to Mars by 2021. A new UAE Space Agency has been created to coordinate the country’s growing space technology sector and to supervise the mission. The probe will take nine months to make the more than 60 million kilometer journey to Mars and will mark the UAE out as one of only nine countries with space programs to explore the Red Planet. The project aims to develop Emirati human capital and boost the space technology industry as a sustainable driver of the UAE’s increasingly diversified economy. Relevant agencies from the United States and United Arab Emirates will consult periodically to continue discussions on current and future space cooperation. (AB 21.03)

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5.10 More Than 500,000 Laborers Working in Dubai

More than half a million unskilled workers are employed in Dubai, according to the Permanent Committee for Labor Affairs (PCLA). The PCLA said that there are 569,128 unskilled workers in Dubai, working for 3,039 companies. The Follow up and Inspection on Workers’ Housing Section of the PCLA is now inspecting worker accommodations using smart devices to reduce the number of violations being committed by employers. There were 5,537 periodic inspections of labor accommodations in the Deira and Bur Dubai areas last year. These inspections revealed that there were 14 housing units with poor facilities, six in Deira and eight in Bur Dubai. (AB 21.03)

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5.11 Dubai’s Non-Oil Foreign Trade Rises To $362.3 Billion in 2014

Dubai’s non-oil foreign trade rose marginally to AED1.331 trillion ($362.3 billion) in 2014 from AED1.329 trillion the previous year. The small increase was driven by a notable boost in its trading with China which topped Dubai’s foreign trade partners with a trade value of AED175 billion, up 29% from 2013. Previously Dubai’s No 1 trade partner, India came second with a value of AED109 billion, followed by the United States at AED83 billion. Saudi Arabia was Dubai’s fourth largest trading partner globally and first in the Arab world with a total trade value of AED52 billion. Imports were worth AED845 billion while exports and re-exports to the emirate reached AED114 billion and AED372 billion respectively.

Figures released by Dubai Customs showed that direct trade contributed AED818.8 billion of Dubai’s total foreign trade value, while free zones trade represented AED488.7 billion and the customs warehouses AED23.8 billion. Of the commodities traded, phones topped the list with a growth of 9%, amounting to AED178 billion while the thriving tourism sector resulted in an 8% growth in jewelry trade to AED55 billion. (WAM 24.03)

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5.12 Saudi Arabia’s Mining Revenues Hit SR 18 Billion

The total revenues of licensed companies working in the field of mining exploitation in Saudi Arabia amounted to about SR18 billion, reports Saudi-based Argaam. Recently Sultan J Shawli, deputy minister for mineral resources, said the total net profit of these licensed companies has hit SR8 billion. He said the total number of valid mining licenses until the end of 2014 amounted to about 1,800 licenses, and 420 million tonnes have been exploited. Shawli said Jazan is one of the important areas in the field of mining, revealing that one of its most important elements is salt which is located in domes, one of them is 1km diameter and 1,500m wide, with 30 million tonnes of stockpile in a concentration of 97% sodium chloride, and there is also a salt dome in Ra’s Hasis at Fursan Island. Minerals discovered in Jazan include potash, which can be used as fertilizer, silica sand in Southeast Jazan, limestone in Um Al Araj which is being exploited by Southern Province Cement and Gypsum Company in the dome of Jazan, and dolomite and marble in Al Darb area northwest of Jazan. The Ministry of Petroleum has booked ten (227 square kilometers) deposits for mining activities. (AME 08.03)

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5.13 Saudi Arabia Deports 300,000 Expats in 5 Months

Almost 300,000 foreigners have been deported from Saudi Arabia in the past five months, accused of being in the kingdom illegally. Ministry of Interior figures showed an average 2,000 illegal expats were sent home daily. The recent statistics also revealed surge in people attempting to enter the kingdom along its border with Yemen, as conflict in the southern Gulf state escalates. Saudi border guards had intercepted about 900,000 people attempting to enter the kingdom illegally, with about 84% along the southern border with Yemen, the ministry said. More than 15,000 detected illegal foreigners are presently in detention centers awaiting deportation. There are at least 9 million foreigners living in Saudi Arabia, which has a total population of 27 million. The kingdom is constantly launching raids on suspected illegal expatriates, including those who have overstayed their visas and others who have crossed porous borders. More than 1 million people voluntarily left the kingdom in 2013 under an historic seven-month amnesty. (AN 23.03)

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5.14 World Bank Halts Yemen Activities Over Security Fears

The World Bank suspended its activities in Yemen on 12 March, citing a sharp decline in the security situation as the country grapples with a Shiite militia uprising. All projects financed by the International Development Association, the Bank’s arm for the world’s poorest countries, and Bank-managed trust funds have been halted. The World Bank said that a review, begun in early February, found that “the situation in Yemen had deteriorated to the degree that the Bank was unable to exercise effective management over its projects.” The Bank, which has pledged more than a billion dollars to develop the impoverished country, said the disbursement of funds had been suspended. The Bank’s office in Sanaa, the capital, was closed temporarily in mid-February in response to the deterioration in security. The Bank said it would continue to monitor the situation in Yemen, highlighting that it remained “fully committed” to supporting the country’s development needs and would resume its operations there once suitable conditions are reestablished. (WB 13.03)

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►►North Africa

5.15 Egypt, Ethiopia & Sudan to Resolve Nile Dam Dispute

Egypt, Ethiopia and Sudan have signed a declaration of principles on 23 March, in a critical step towards resolving a four-year dispute over Nile water sharing arrangements among Basin countries. The details of the agreement are expected to be announced later. El-Sisi said the principles agreed upon, including understandings on the dam’s storage capacity and the technique of filling its main reservoir, would safeguard the interests of all three countries. Ethiopia’s Prime Minister Desalegan stressed that the Renaissance dam his country has been building to generate electricity for economic development projects would not cause any harm to the Egyptian people. Ethiopia chose to take the “collaborative path” on the issue of distribution of the Nile water, he added.

For several years, Egypt has raised fears Ethiopia’s under-construction $4.2 billion Grand Renaissance Dam would negatively affect its Nile water share. The Ethiopian 6,000 MW dam, set to be Africa’s largest, is expected to be fully completed by 2017. Ethiopia has finished constructing at least 40 percent of the dam. (AB 24.03)

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5.16 Arabian Gulf Allies Pledge $12 Billion to Support Egypt at Summit

Arabian Gulf allies pledged a further $12 billion of investments and central bank deposits for Egypt at an the Sharm el-Sheik international summit, a big boost to President Abdel Fattah Al Sisi as he tries to reform the economy after years of political upheaval. Kuwait, Saudi Arabia and the UAE each offered $4 billion to Egypt, which is grappling with Islamist terror as it attempts to improve the investment climate four years after a popular uprising that touched off protracted turmoil. The UAE said it would deposit $2 billion of its pledge in the Egyptian central bank, while Saudi Arabia said $1 billion of its pledge would go to the bank. Oman said it would give Egypt $500 million in grants and investment over the next five years. Egypt hopes the conference will project an image of stability and improve investor confidence hit by the political upheaval touched off by the overthrow of Pres. Mubarak. Cairo wants to double foreign investment in this fiscal year to $8 billion, despite an Islamist insurgency in northern Sinai and frequent militant attacks across the country.

Saudi Arabia, Kuwait and the UAE, which backed the Sisi-led army overthrow of Islamist President Morsi in July 2013 following mass unrest against his rule, have kept Egypt’s economy afloat since then with $23 billion in oil shipments, cash grants and central bank deposits. The government targets a budget deficit of 10% of gross domestic product by 2018/19, down from 15% last year. Unemployment, currently around 13%, is also a major challenge. GDP is expected to grow by 4% in the fiscal year ending in June, up from 2.2% last year, officials say. (Reuters 14.03)

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5.17 Egypt Targeting 4.5 – 5% Growth in 2015/16

Egypt expects greater investment and ongoing fiscal reforms to boost economic growth in the 2015/16 fiscal year to 4.5-5% and shrink its budget deficit to 9.5-10% of gross domestic product (GDP), the finance ministry said on 18 March. The government is pushing an economic agenda focused on reforming taxes and subsidies while attracting billions of dollars from foreign investors scared away by political turmoil that began with a 2011 uprising. The finance ministry said that it would continue to cut subsidies gradually and make cash transfers to the poor, which make up about 40% of Egypt’s 90 million people. Economic growth slowed to 2% in 2011, but recovered to 5.6% in the last six months of 2014. The IMF expects growth to reach 4% in the current fiscal year ending on 30 June. The budget deficit, long beset by costly fuel and bread subsidies, is set to exceed 10% for the same period.

Investors have praised Egypt’s reforms, including a five-year plan to eliminate energy subsidies which began last summer without sparking popular unrest. The government clinched deals worth $36 billion at the recent investment conference. The finance ministry said it would boost spending on infrastructure as well as education and health. A value-added tax is also part of the reform agenda, but it is not clear when that would be introduced. (Ahram 18.03)

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5.18 Egypt’s Trade Deficit Rises to LE21.88 Billion in December 2014

Egypt’s trade deficit widened to LE 21.88 billion in December 2014, from LE17.96 billion a year earlier, CAPMAS said on 11 March. The rise in the trade deficit is due to a 9.6% increase in imports’ value, to stand at 38.20 billion pounds in 2014, as opposed to 34.86 billion pounds in December 2013, CAPMAS said. The hike in imported goods’ prices mostly involved petroleum products and vehicles. CAPMAS also reported a 3.5% drop in exports’ value, standing at LE16.32 billion last December, while it was 16.90 a year earlier. Natural gas, medicines, cosmetics, dairy products and clothes were among the main products to suffer drop in exports. Egypt’s annual inflation rate rose by 1.3% in February, to become 10.7%, CAPMAS announced. Inflation increased last summer after the government reduced petroleum subsidies and introduced new taxes in July 2014, hiking fuel prices by up to 78%. (Aswat Masriya 12.03)

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5.19 BP Signs $12 Billion Energy Deal in Egypt

BP (formerly British Petroleum) has signed an agreement to invest $12 billion in Egypt that will produce 3 billion barrels of oil equivalent, a joint statement from the company and the government said on 14 March. The deal, finalized at an international investment conference in the Sharm El-Sheikh resort, will help Egypt as it tackles its worst energy crisis in decades. The agreement will include a West Nile Delta project, exploration and resource appraisal activities, East Nile Delta operations and operations in the Gulf of Suez. Rising energy consumption and decreasing production have turned Egypt from a net energy exporter to a net importer in the last few years and caused persistent blackouts. (BP 14.03)

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5.20 Egypt to Require Pre-Obtained Visas for Foreigners of Any Nationality

Any person wishing to enter Egypt will need to obtain a visa before departure and will not be offered it at the airport upon arrival, Egypt’s ministry of foreign affairs announced on 16 March. Individual tourists must obtain visas for tourism purposes from Egypt’s diplomatic missions prior to their arrival in Egypt, the statement said. Organized tourist groups will be the only exception and the decision will apply from 15 May 2015. Many nationalities, including Europeans and American, were allowed to obtain an Egyptian visa at the airport upon arrival. The same decision was taken in September 2011 but the government suspended it after three days due to a public outcry and accusations that it will be a big blow to Egypt’s tourism industry. The tourism sector has again expressed its concern. The foreign ministry expressed that security concerns have triggered the move. (Ahram Online 17.03)

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5.21 Morocco’s Railway Development Strategy to Cost $20 Billion

Morocco’s Minister for Equipment, Transport and Logistics Rebbah showcased in Dubai Morocco’s strategy to revamp the railway sector, whose total cost is estimated at $20 billion. Speaking at a conference on railways in the MENA region, Rebbah said that the strategy is designed to be completed by 2035. He added that the strategy aims at developing 1500 kilometers of high speed rail links and 2,743 of conventional railways as well as a logistics platforms linked to the railway network. In this respect, he added that the Casablanca-Tangier high speed rail link will be extended to the south between Marrakech and Agadir as well as to the eastern city of Oujda. (MAP 17.03)

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5.22 Remittances of Moroccans Living Abroad Reach MAD 9.4 Billion in February

The remittances of Moroccans living abroad have increased by 6.9% to reach 9.48 billion Dirhams by the end of February compared to 8.86 billion Dirhams during the same period a year earlier, new figures from the Exchange Office have shown. The same source added that travel revenues were down 8.2% while expenses increased by 9.2% by the end of February, 2015. Direct foreign investments in Morocco were down 15.2% from 4 billion Dirhams to 3.4 billion Dirhams between February 2014 and February 2015. This is mainly due to a 13.9% decrease in revenues which exceeded the decrease in expenditures (-8.9%), said the Exchange Office, which has just published the preliminary indicators of foreign trade for the year 2015. (MWN 17.03)

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5.23 Phosphates Help Reduce Morocco’s Trade Deficit by 37.2%

A 20.4% increase in phosphate sales has reduced Morocco’s trade deficit by 37.2%. The trade gap has narrowed to MAD 20.5 billion by the end of February against MAD 32.64 billion a year earlier. The Office Cherifien de Phosphate (OCP), the world’s leading phosphate exporter, has exported MAD 5.2 billion worth of phosphates, an essential ingredient for producing fertilizers, and its derivatives by the end of February, 2015, compared to MAD 4.3 billion during the same period of last year. Imports decreased by 15.2% moving from MAD 63.18 billion to MAD 53.56 billion. The decrease in imports was mainly due to the falling oil prices which also led to a decline in the country’s imports of energy (93.8% of the total decline of imports).

The Foreign exchange regulator said that tourism receipts declined 8.2%, while the remittances of Moroccans living abroad have increased by 6.9% to reach MAD 9.48 billion by the end of February compared to MAD 8.86 billion during the same period a year earlier. Direct foreign investments in Morocco were down 15.2% from MAD 4 billion to MAD 3.4 billion between February 2014 and February 2015. This is mainly due to a 13.9% decrease in revenues which exceeded the decrease in expenditures (-8.9%). (MWN 19.03)

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5.24 Moroccan Smartphone Sales up 42% in 2014

The Moroccan market for household goods and equipment rose by 10% in 2014, compared to the results for 2013. According to GFK Temax, the sales of household goods and equipment in Morocco recorded sales of MAD 11.16 billion, up by 9.7% compared to the previous year. All four main sectors, telecommunications (TC), Major Domestic Appliances (MDA), Consumer Electronics (CE) and Small Domestic Appliances (SDA) contributed to the increase in turnover. The report revealed that the increase was mainly apparent in the telecommunications market, with recorded sales of MAD 4.48 billion in 2014, up by 11.5%, compared to the overall 2013 results. The increase was driven by rapid growth in sales of smartphones, which were up by 42% in 2014. The sales of phablets (a combination of smartphone and tablet) were up by 650%, compared to the results for 2013. Phablets are now responsible for 4% of the total market value, says the report.

The Major Domestic Appliances sector was also up by 6.4 %, compared to the previous year and recorded sales of MAD 3.65 billion. According to the report, growth was concentrated in the second and third quarters of 2014, up by 13% and 12% respectively, compared to the same quarters in 2013, coinciding with the Muslim holy month of Ramadan, summer and Eid El Adha (Feast of Sacrifice) sales promotion. The report said that dishwashers saw the greatest increase in sales in the MDA sector up by 21%, compared to the previous year.

Sales of Small Domestic Appliances such as food preparation equipment and electric heaters continued their upward trend. In 2014, the figure was MAD 394.9 million, up by 14%, compared to 2013. 2014 was also a good year for sales of TVs, thanks to major sporting events such as the FIFA World Cup and the African Cup of Nations. MAD 2.6 billion worth of goods were sold in the Consumer Electronics sector in 2014, up by 11.5%, compared to 2013. Curved screen TVs were the most significant innovation in 2014. However, with prices still very high, there was only a trickle of sales, the report added. (MWN 10.03)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Turkey’s Unemployment Rate Increases to a 4 Year High

Turkey’s unemployment rate rose to a four-year high of 10.9% in December 2014, up from 10.7% in November 2014 and 10% in December 2013, according to the Labor Force Statistics data released by the Turkish Statistics Institute (TUIK) on 16 March. The non-agricultural unemployment rate rose to 12.9%, while the youth unemployment rate for the 15-24 age group rose to over 20% at 20.2% and unemployment in the 15-64 age group increased to 11.2% over the same period. The rise in unemployment was caused by the slowing down of economic growth and the rise in the participation to the labor force, according to analysts.

Deputy Prime Minister Ali Babacan said on 13 March that Turkey’s 2014 growth rates would be announced at below 3%. The official growth numbers for the last year will be announced soon. Turkey’s growth potential was around 3% with its own dynamics, but each increase in exports makes a positive contribution to the country’s growth, Babacan said.

The total number of unemployed individuals aged 15 years old and over was 3.1 million individuals, while the unemployment rate stood at 10.2% for men and at 12.6% for women, according to the TUIK data. The number of employed individuals aged 15 years old and over was 25.6 million individuals in December 2014 and the employment rate stood at 44.7%. The employment rate was 63.6% for men and 26.2% for women. Of those who were employed in this period, 19.5% were employed in agriculture, 20.5% were employed in industry, 7.1% were employed in construction and 52.8% were employed in the service sector. (TUIK 16.03)

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6.2 5 Million Turks Unable To Receive Health Services Over Debts

Around 5 million people in Turkey are unable to receive public health services due to unpaid social security premium debts owed to the state, experts have warned.

Ankara introduced a nationwide public health insurance scheme back in 2012. The state covers each individual’s health expenses until he or she graduates from university, according to the scheme, termed the General Health Insurance (GSS). The GSS requires citizens to pay monthly social security premiums after the age of 25. Back in 2012, the government said graduates would continue to receive free public health services if they can prove that they are unemployed or cannot afford to pay the premiums. Very few people say they are aware of the requirement which enables one to be exempt, which the state calls the “income test.”

Those attending university are supposed to take this test — which is administered by various social aid organizations — before the age of 25, while high school students must take it by the age of 20 and those not attending school are obligated to take the test before the age of 18. If the results yield a per capita income of less than TL 400 a month, the state is obliged to pay that person’s premium, but if they earn more than TL 400, they are obliged to pay a premium based on their income. However, most unemployed recent graduates are unaware of the existence of this test.

Analysts say the GSS system has not yielded the desired results, with the state having to hold millions of people responsible for debts without checking if they are employed or not. Today, tens of thousands of them are jobless university graduates with premium debts to the state. Some 7 million Turks have social premium debts, which currently total TL 9 million, according to the Turkish Doctors Union (TTB). Five million of these people are barred from receiving health care services due to their debts. (Zaman 17.03)

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6.3 Turkey’s First Nuclear Plant Delayed, ‘Not Ready Before 2022’

Turkey’s first nuclear power plant is unlikely to be ready before 2022, energy officials said on 23 March of the $20 billion project that has been beset by regulatory hurdles and complicated by Russia’s financial woes. Dependent on imports for almost all of its energy, Turkey has embarked on an ambitious nuclear program, commissioning Russia’s State Atomic Energy Corporation (Rosatom) in 2013 to build four 1,200 megawatt (MW) reactors. With energy import costs at about $50 billion annually and demand forecast as the fastest growing in Europe, Ankara wants at least 5% of its electricity generation to come from nuclear energy in under a decade, cutting dependency on natural gas largely bought from Russia.

Rosatom initially pledged to have the first of the four reactors in the southern Turkish town of Akkuyu ready by 2019. A senior Turkish energy official said the project would not be online before at least 2022, given that ground-breaking has yet to happen. Part of the delay has been environmental approval after heightened concern about nuclear power following the 2011 earthquake and tsunami that crippled Japan’s Fukushima plant. Akkuyu NGS, the project company set up by Rosatom, had to wait for almost a year to obtain environmental approval from Turkish authorities. Consent was given in December, coinciding with Russian President Vladimir Putin’s visit to Turkey. (HDN 23.03)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Passover Observance Will Begin on 3 April

On Friday night, 3 April, Israel and world Jewry will begin the week-long celebration of the Passover (Pesach) holiday. Passover celebrates the liberation of the Jewish People from slavery in Egypt by the hand of G-d. It is central to Jewish identity and Jewish practice, since the Exodus and life in the wilderness led to the true birth of the Jews as a distinct entity. Jacob and Josef came to Egypt numbering 70 souls and Moses led 600,000 out after the defeat of Pharaoh. Probably the most significant observance related to Pesach involves the removal of chametz (or leaven) from Jewish homes and businesses. This commemorates the fact that the Jews leaving Egypt were in a hurry and did not have time to let their bread rise. Even converts to Judaism relate to the Exodus as their own ancestors as having left Egypt. It is also a symbolic way of removing the “puffiness” (arrogance, pride) from our souls. Instead, special non-leavened bread called matzah is consumed, among a myriad of other special holiday dishes.

On the first night of Pesach (first two nights for Jews outside of Israel), there is a special family meal filled with ritual to remind Jews of the significance of the holiday. This meal is called a seder, from a Hebrew root word meaning “order,” because there is a specific set of information that must be discussed in a specific order. The seder is full of symbolism, all pointing to one salient point: that Jews all remember that G-d took us out of slavery in Egypt to freedom to observe his Torah. Pesach lasts for seven days (eight days outside of Israel). The first and last days of the holiday (first two and last two outside of Israel) are days on which no work is permitted. Work is permitted on the intermediate days. These intermediate days on which work is permitted are referred to as Chol Ha-Mo’ed, as are the intermediate days of Sukkot. Though work is permitted, many take vacations and a full work environment returns only after the holiday. Passover ends on 10 April in Israel, 11 April in the Diaspora.

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7.2 Israel Changes to Summertime on 27 March

On Friday, 27 March 2015, at 02:00, clocks in Israel will be turned forward by 1 hour to 03:00 local daylight time. On Sunday, 25 October 2015, Israeli clocks will be turned back at 02:00 by one hour, ending daylight savings time.

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7.3 Dionne Warwick Coming to Israel in May

Legendary American singer Dionne Warwick will give one concert in Israel this spring which will include the greatest hits from her long career. Warwick, 74, will perform at the Menora Mivtachim Arena in Tel Aviv on 19 May. She is joining other veteran stars who will play Israel in the coming months or have performed in the country recently, including the Alan Parsons Project, Engelbert Humperdinck, Gloria Gaynor and Boney M. Warwick is considered one of the greatest singers of the 1960s. She is second only to Aretha Franklin as the most-charted female vocalist of all time, with 69 of her singles making the Billboard Hot 100 between 1962 and 1998. She has won five Grammy Awards and sold more than 100 million copies of her albums. Warwick is being brought to Israel by producer Udi Appelboim and the Concerto company along with Talent Productions. Tickets will be sold at the Lean office for NIS 199 to NIS 1,000 ($50 – 250). NIS 10 ($2.50) from each ticket will be donated to the Variety children’s charity. (Ynet 24.03)

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*REGIONAL:

7.4 Jordan to Change to Summertime on 26 March

Jordan will switch to summertime at midnight, 26 March. At that time, Jordan’s clocks will be set forward by 60 minutes, making Jordan three hours ahead of Greenwich meantime. Jordan will then be 7 hours ahead of the United States’ Eastern Standard Time. (Petra 16.03)

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7.5 Cancer Second Most Common Cause of Death in Jordan

Cancer is the second leading cause of death in Jordan after cardiovascular diseases and the disease’s mortality and morbidity are expected to increase as the young population ages with longer life expectancy, according to the director of the King Hussein Cancer Centre (KHCC). The number of new cancer cases diagnosed among Jordanians has increased by around 44% in one decade, from 3,362 cases in 2000 to 4,849 in 2010. The increase in the number of cancer patients places more pressure on the KHCC, which is currently implementing an expansion project.

According to statistics, bed occupancy at the center was 85% in 2014 and 8,036 cancer patients were admitted. The number of patients examined in the emergency room was 23,757, while 3,608 surgeries were conducted that year. Of the total patients, 30% are Arabs, according to the director of KHCC. Two of the expansion project’s four stages have been completed and almost one-third of work in the third stage has been completed, he said, adding that the facility is expected to be ready by mid-2016. The expansion, which consists of an outpatient building and an inpatient tower, will facilitate a quantitative and qualitative increase in services to cancer patients. The new JD130 million building will include six operating rooms, increasing the total number at the KHCC to 12.

The King Hussein Cancer Foundation and the KHCC were established in 1997, as a stand-alone independent non-governmental, not-for-profit institution founded by a Royal decree to combat cancer in Jordan and the region. The foundation signed a cooperative agreement with the National Cancer Institute of the United States and has been working to transform the KHCC into a comprehensive center for cancer care, training and education as well as research. The KHCC gained accreditation by the US-based Joint Commission International in 2006 and as an oncology center in 2008. It is equipped to treat all types of adult and pediatric cancers. Currently, the KHCC treats around 60% of cancer cases in Jordan in addition to patients from neighboring countries, according to official figures. (JT 14.03)

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7.6 Egypt Unveils Plans for New Administrative Capital

Egypt plans to build a new administrative and business capital east of Cairo that will house five million people. The proposed new city was presented to potential investors at the three-day conference, which began on 13 March at Sharm al-Sheikh. Unveiling an initial plan in front of global leaders and diplomats attending the conference, Housing Minister Mustafa Kamel Madbuli said the new city will be built between Cairo and the canal city of Suez. The proposed 700 square kilometer (270 square mile) city will house up to five million people in 25 residential districts. Cairo’s population is expected to grow to 40 million by 2050 from the current 18 million.

Parliament, presidential palaces, government ministries and foreign embassies would move to the new metropolis from out of Cairo, the minister said, adding these projects would be executed over the next five to seven years at a cost of $45 billion. An overall cost for the new city was not revealed, nor were details on how it would all be funded. President Abdel Fattah al-Sisi hopes investors meeting in Sharm al-Sheikh will help kick-start Egypt’s troubled economy. The conference aims to attract billions of dollars into Egypt’s economy. (AFP 14.03)

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7.7 85% of Moroccans Want English as First Foreign Language

According to a new survey conducted by news website Hespress, Moroccans seem to be more and more in favor of replacing French with English in the Moroccan educational system. Of the more than 41,526 people who participated in the survey, only 14.02% said that French should remain the country’s first foreign language. People in favor of replacing French with English, on the other hand, pulled in a whopping 85.98% of the vote.

Moroccans have become more outspoken about the importance of switching the country’s education system from French to English. For the majority of them, as it is the case with the sample surveyed by Arabic-speaking news website Hespress, French is limiting their access to knowledge and economic opportunities. Even Moroccan officials have expressed on numerous occasions the importance of adopting English over French within the Moroccan educational system. For Prime Minister Abdelilah Benkirane, for instance, English is the language of today’s science, technology and commerce.

However, there are still people in Morocco who fiercely lobby for French to be kept the first foreign language of the country. Their efforts have yielded results as the Supreme Council for Education, Training and Scientific Research is said to be reconsidering earlier recommendations to replace French with English in the Moroccan curriculum. The new recommendations, if adopted, will be included in the Supreme Council’s Strategic Report to be submitted to King Mohammed VI. (MWN 14.03)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 Israel Brain Technologies Launches “Brainnovations” Startup Launchpad

The “Brainnovations” Startup Launchpad and “Braingels” Angels Investor Network were launched on 11 March by Israel Brain Technologies (IBT) at their BrainTech 2015 conference in Tel Aviv. The goal of both Brainnovations and Braingels is to promote and facilitate the creation of startups in the brain technology arena and to turn Israel’s neurotech startup ecosystem into a world-leading hub of innovation. The Brainnovations Startup Launchpad offers entrepreneurs with promising ideas in the braintech space and early-stage startups a four-month focused educational program that includes a series of lectures and workshops in key areas of entrepreneurship, as well as mentoring by industry leaders and neuro-experts. Participating projects will also gain access to IBT’s international network of senior industry executives and investors and will receive support with team and board recruitment. The program will culminate with a demo day in the presence of private and corporate investors.

The Braingels Angels Investor Network is an international network of angel investors with an interest in early-stage investment in braintech startups. IBT will manage the Braingels Network – providing deal flow sourcing, due diligence and investment support. Both programs mark IBT’s commitment to creating, incubating and supporting braintech innovation from the earliest stages of research through development to the creation of successful companies.

Tel Aviv’s Israel Brain Technologies (IBT) is a non-profit organization whose mission is to advance Israel’s neuro-technology industry by accelerating neuro-innovation and fostering international collaboration. IBT is based on the vision of former Israeli President Shimon Peres of turning Israel into a global hub of brain technology – from “Startup Nation” to “Brain Nation.” IBT’s international BrainTech Conference brings together thought-leaders from around the world to advance neuroscience and neuro-technology – entrepreneurs, neuroscientists, clinicians, investors, startups, multinationals and policymakers. IBT is led by a team of technology entrepreneurs and life science professionals and is advised by renowned academic, industry and public sector representatives. (IBT 12.03)

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8.2 One World Cannabis Signs Agreement with Sheba Academic Medical Center

OWC Pharmaceutical Research Corp.’s wholly owned subsidiary One World Cannabis, Ltd. signed a collaboration agreement with Sheba Academic Medical Center, the largest hospital in Israel and in the Middle East. Within the framework of a new collaboration agreement, the company will initiate a study to explore the effect of several combinations of cannabidiol (CBD) and tetrahydrocannabinol (THC) on multiple myeloma, starting with a basic science on multiple myeloma cells.

Multiple myeloma, a cancer of plasma cells, accounts for 10% of all hematologic malignancies. It is the second most common hematologic cancer and represents 1% of all cancer diagnoses and 2% of all cancer deaths. The study will be conducted at the Sheba Academic Medical Center facilities, composed of a highly diverse yet interactive collaborative team of molecular biologists, immunologists, cell biologists and clinicians, located in Ramat Gan (near Tel Aviv), Israel.

The Chaim Sheba Academic Medical Center at Tel Hashomer, Israel (near Tel Aviv), is the largest and the most comprehensive medical center in Israel and the Middle East, recognized internationally for its leadership in clinical treatment, as well as basic and applied medical research. It is situated on a 150-acre campus at Tel Hashomer on the outskirts of Tel Aviv. It is the teaching center for Tel Aviv University’s medical and nursing schools, and is home to Israel’s national institutes of health, central blood bank, and military rehabilitation facilities.

Petah Tikva’s One World Cannabis is an Israel-based company founded in 2014 by a group of professionals with expertise in the field of medical cannabis (marijuana) treatment and medical cannabis regulatory affairs. The Company’s Research Division is focused on pursuing clinical trials evaluating the effectiveness of cannabinoids in the treatment of various medical conditions, while its Consulting Division is dedicated to helping governments and companies navigate complex international cannabis regulatory frameworks. The Company is a wholly owned subsidiary of OWC Pharmaceutical Research Corp. (OWCP 11.03)

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8.3 Evogene First Collaboration with Leading Food Company for Improving Crop Productivity

Evogene disclosed its first collaboration agreement with a multinational food company. The focus of the multi-year collaboration is to improve productivity of a key crop underlying one of the consumer company’s leading branded product lines through advanced breeding methods. The agreement leverages Evogene’s decade-long experience, data base and knowhow for yield improvement and advanced breeding methods. Under the agreement, Evogene will utilize its proprietary computational and plant validation platforms to develop improved pre-breeding varieties of the target crop. Proof of concept validation activities will be conducted in both model plants and the target crop, which represents a new addition to Evogene’s growing crop improvement portfolio. The three year collaboration, signed late last year, entitles Evogene to research and development fees and success based payments.

Rehovot’s Evogene is a leading company for the improvement of crop productivity and economics for the food, feed and biofuel industries. The Company has strategic collaborations with world-leading agricultural companies to develop improved seed traits in relation to yield and a-biotic stress (such as tolerance to drought), and biotic stress (such as resistance to disease and nematodes), in key crops as corn, soybean, wheat and rice, and is also focused on the research and development of new products for crop protection (such as weed control). (Evogene 18.03)

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8.4 Ignyta Acquires Four Oncology R&D Assets from Teva

Teva Pharmaceutical Industries and San Diego, California’s Ignyta, a precision oncology biotechnology company, announced the acquisition by Ignyta of the worldwide rights and assets relating to four targeted oncology development programs in exchange for 1.5 million shares (6%) of Ignyta’s common stock. Concurrently, Ignyta has entered into stock purchase agreements with Teva, and selected additional healthcare investors, whereby Teva will purchase a further 1.5 million shares of common Ignyta stock at a price of $10 per share in a registered direct offering. The other investors will purchase an additional 2.7 million shares at $10 per share, valuing the total offering at approximately $41.6 million. Ignyta also assumed all of Teva’s ongoing obligations under certain contracts relating to the purchased programs, including the agreements under which Teva in-licensed rights to the assets.

Teva Pharmaceutical Industries is a leading global pharmaceutical company that delivers high-quality, patient-centric healthcare solutions to millions of patients every day. Headquartered in Israel, Teva is the world’s largest generic medicines producer, leveraging its portfolio of more than 1,000 molecules to produce a wide range of generic products in nearly every therapeutic area. In specialty medicines, Teva has a world-leading position in innovative treatments for disorders of the central nervous system, including pain, as well as a strong portfolio of respiratory products. (Ignyta 17.03)

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8.5 Teva’s TEV-48125 Demonstrates Treatment Concept After a Single Dose

Teva Pharmaceutical Industries announced the successful completion of its Phase IIb migraine prevention program with positive top-line results from a Phase IIb study evaluating the efficacy, safety and tolerability of two doses of subcutaneous TEV-48125 for the prevention of high frequency episodic migraine (characterized by 8-14 days of headache per month). TEV-48125 is a novel investigational anti-calcitonin gene-related peptide (CGRP) monoclonal antibody, and these data, together with the recent results achieved in the difficult to treat chronic migraine setting, make this the first therapy to successfully meet efficacy endpoints in the prevention of both chronic and episodic migraine, and at multiple doses, in advanced clinical trials. Initial analysis of results demonstrated that both doses of TEV-48125 met primary and secondary endpoints achieving significant reductions in mean monthly migraine days and monthly headache days relative to baseline. These are considered as validated endpoints to assess benefits of new migraine treatments. Additionally, a single administration of both tested doses of TEV-48125 resulted in a statistically significant separation from placebo. Data confirm that treatment with TEV-48125 resulted in separation for both primary and secondary endpoints, at all months of therapy, in both the chronic and episodic migraine clinical trials.

Teva Pharmaceutical Industries is a leading global pharmaceutical company that delivers high-quality, patient-centric healthcare solutions to millions of patients every day. Headquartered in Israel, Teva is the world’s largest generic medicines producer, leveraging its portfolio of more than 1,000 molecules to produce a wide range of generic products in nearly every therapeutic area. In specialty medicines, Teva has a world-leading position in innovative treatments for disorders of the central nervous system, including pain, as well as a strong portfolio of respiratory products. (Teva 23.03)

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8.6 Kamada Awarded European Orphan Drug Designation for Its Alpha-1 Antitrypsin

Kamada announced that the European Commission, acting on the recommendation from the Committee for Orphan Medicinal Products of the European Medicines Agency (EMA), has designated the Company’s proprietary human intrevenous (IV) Alpha-1 Antitrypsin (AAT) as an orphan medicinal product to treat Graft-versus-host disease (GvHD). In October 2014 Kamada received Orphan Drug designation from the U.S. Food and Drug Administration (FDA) for its AAT by IV to treat GvHD. Orphan designation is a status assigned by regulatory authorities, and in this case, the EMA to a medicine intended to treat a rare condition (prevalence of not more than 5 in 10,000 people in the European Union). The orphan designation allows Kamada to benefit from incentives offered by the EU to develop the designated medicine for the rare indication.

Preliminary human and animal studies indicate that AAT may be able to treat and reduce the severity of GvHD, which is one of the key, life-threatening complications of allogeneic stem cell transplantation. GvHD is an immunologically-based disease that may result in significant damage to multiple organs and tissues such as the liver, gastrointestinal tract, skin and mucosal membranes. Tissue destruction also leads to increased inflammatory signals, perpetuating and augmenting the disease process by contributing to the cytokine storm that fuels GvHD even further and, thereby, the damage continues and its intensity is increased.

Ness Tziona’s Kamada is focused on plasma-derived protein therapeutics for orphan indications, and has a commercial product portfolio and a robust late-stage product pipeline. The Company uses its proprietary platform technology and know-how for the extraction and purification of proteins from human plasma to produce Alpha-1 Antitrypsin (AAT) in a highly-purified, liquid form, as well as other plasma-derived proteins. AAT is a protein derived from human plasma with known and newly-discovered therapeutic roles given its immunomodulatory, anti-inflammatory, tissue-protective and antimicrobial properties. (Kamada 23.03)

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8.7 ISA Scientific, Yissum, Hadasit & Kennedy Trust Collaborate on Cannabidiol Treatment

Yissum Research Development Company, the technology transfer company of the Hebrew University of Jerusalem, Hadasit, the technology transfer company of the Hadassah Medical Organization in Jerusalem, and the Kennedy Trust for Rheumatology Research (KIR) in the UK announced today that they have signed an exclusive worldwide licensing and collaboration agreement with ISA Scientific, a biopharmaceutical company focused on the development and commercialization of cannabinoids as human medicine, for using the non-psychoactive cannabinoid, cannabidiol (CBD), to treat serious medical conditions, including diabetes, inflammatory diseases (like arthritis, atherosclerosis and ulcerative colitis) and cardiovascular disorders. (Yissum 23.03)

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8.8 Alma Lasers Releases Soprano ICE Multi-Platform Hair Removal System

Alma Lasers announced the addition of the Soprano ICE platform to its product portfolio. The Soprano ICE Multi-Platform presents a breakthrough in hair removal technology, combining the high absorption benefits of the Alexandrite (755nm) wavelength with the advantages of a diode laser providing more comfort for the patient and lower maintenance for the practitioner. This new multi-laser, multi-technology treatment approach allows practitioners to treat the widest range of hair types and colors- specifically light-colored and thin hair, quickly and virtually pain free, all year round. The Soprano ICE Multi-Platform offers several modules including Speed technology, allowing practitioners to perform more sessions in half the standard treatment time, the Compact applicator allowing for versatile treatment methods, the Facial TIP for treating small or hard to reach areas including the ears, nostrils and glabella, and ICE proprietary advanced contact cooling technology.

Caesarea’s Alma Lasers is a global innovator of laser, light-based, radiofrequency and ultrasound solutions for the aesthetic and surgical markets. We enable practitioners to offer safe and effective procedures while allowing patients to benefit from state-of-the-art, clinically proven technologies and treatments. (Alma Lasers 21.03)

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8.9 Vectorious Medical Technologies Closes $5 Million Financing Round

Vectorious Medical Technologies of Tel Aviv recently closed a $5 million financing round for the development of its miniature wireless hemodynamic monitoring sensory implant toward first human trials. Among the investors is the Global Cardiovascular Innovation Center of the Cleveland Clinic. With the push of a button, patients with the Vectorious implant would get a pressure reading from their heart’s left atrium, which will enable optimal adjustment of their medical treatment. Left atrial pressure provides earlier and more specific indication of cardiac deterioration than does the CardioMEMS device approved by the US FDA last May for measuring pulmonary (lung) artery pressure. That breakthrough American device already is reducing readmissions by up to 40% and Vectorious believes it can be even more effective. It took about four years to develop the first working model of the Vectorious device, expected to be tested this coming year in collaboration with American and Israeli cardiologists. The 10-person company has a subsidiary in Ohio to oversee this next stage. (Vectorious 24.03)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 RADWIN’s 5000 JET PtMP Features a Smart Beamforming Antenna

Tel Aviv’s RADWIN, the global provider of sub-6 GHz broadband wireless solutions, announced the launch of RADWIN 5000 JET point-to-multipoint solution. The JET platform sets a new performance bar in the industry, delivering highest capacity and longer range than any other point-to-multipoint system in the industry. The JET antenna’s Smart Beamforming mechanism delivers a point-to-point experience with the economics of a point-to-multipoint solution. The JET system cancels radio interference and enables operation in the most heavily congested unlicensed bands and in non-line-of-sight (NLOS) conditions, making it the ideal solution for broadband wireless applications.

RADWIN is a leading provider of wireless Point-to-Point, Point-to-Multipoint and FiberinMotion solutions for broadband-in-motion. RADWIN’s solutions deliver voice, video and data with unmatched high-capacity for long ranges and are deployed in over 150 countries. (RADWIN 12.03)

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9.2 Fortis 4G by Magal Receives the Seguritecnia Prize for Spain

Magal Security announced that its Fortis4G advanced command and control solution installed in the Port of Tarragona, Spain was awarded the “best security system installed in Spain during 2014” at the XXVIII Seguritecnia International Security Awards in Madrid, Spain. Fortis4G was implemented in Tarragona by Magal’s Spanish subsidiary as the core of an overall integrated physical and cyber security management system (PSIM & SEIM), deployed in the main control center and several distributed control rooms. It also enables smooth interaction of diverse land and marine forces. The Seguritecnia committee found Fortis4G to be revolutionary and thus deserving of its prestigious award.

Yehud’s Magal S3 is a leading international provider of solutions and products for physical and cyber security, as well as safety and site management. Over the past 45 years, S3 has delivered tailor-made security solutions and turnkey projects to hundreds of satisfied customers in over 80 countries – under some of the most challenging conditions. Magal S3 offers comprehensive integrated solutions for critical sites, managed by Fortis4G – our 4th generation, cutting-edge hybrid PSIM with SEIM (Physical Security Information Management system integrated with Security Information & Event Management). The solutions leverage our broad portfolio of homegrown PIDS (Perimeter Intrusion Detection Systems), advanced outdoors CCTV / IVA technology and Cyber Security solutions. (Magal S3 11.03)

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9.3 NICE & BoomeRing Integrate Mobile Recording Solution for Regulatory Compliance

NICE Systems and BoomeRing, a leading global player in converged communication solutions for telecoms and enterprises, announced that they have successfully integrated BoomeRing’s mobile recording service with the NICE Engage platform. The integrated offering provides a cost effective way for mobile carriers to record both voice and SMS interactions in order to ensure regulatory compliance. With the new integration with NICE, carriers can now expand their infrastructure with the BoomeRing Enterprise Compliance Server (ECS) and allow their end-customers to record mobile voice and SMS interactions by leveraging the end-customer’s existing NICE Engage Platform. There is no need to add a separate system since the infrastructure is already in place, resulting in significant cost savings.

This partnership will enable organizations to have an integrated solution to comply with the latest international cellular record keeping regulations, including FCA (Financial Conduct Authority) in the UK and Dodd-Frank in the US. These rules mandate that financial institutions capture, store and retrieve mobile communications that relate to specific trades in the UK and US. With further regulations being considered across many European and Asian financial centers, the integration of BoomeRing and NICE Engage future proofs customers’ mobile recording capabilities and ensures continuous regulatory compliance.

Ra’anana’s NICE Systems is the worldwide leading provider of software solutions that enable organizations to take the next best action in order to improve customer experience and business results, ensure compliance, fight financial crime and safeguard people and assets. NICE’s solutions empower organizations to capture, analyze, and apply, in real time, insights from both structured and unstructured Big Data. (NICE 24.03)

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9.4 USMC Awards Elbit Contract for the Common Laser Range Finder – Integrated Capability

The United States Marine Corps awarded a subsidiary of Elbit Systems of America, a wholly-owned subsidiary of Elbit Systems, a $73.4 million, Indefinite Delivery/Indefinite Quantity contract for the Common Laser Range Finder-Integrated Capability (CLRF-IC). Work will be performed in Merrimack, New Hampshire. The period of the IDIQ contract extends through March 2020. To date, Elbit Systems of America has received an initial order in the amount of $7.5 million under the IDIQ contract. The CLRF-IC replaces the Marine’s currently fielded equipment with a system that provides 24-hour observation capability; accurate range to targets; the ability to confirm spot on target with laser designation systems; and accurate target location in a variety of conditions, including magnetically disturbed environments, areas with overhead clutter, and in GPS-denied situations. The CLRF-IC’s highly reliable performance and minimal life cycle cost give the warfighter a more affordable mission capability.

Elbit Systems of America is a leading provider of high performance products, system solutions, and support services focusing on the commercial aviation, defense, homeland security, cyber security, and medical instrumentation markets. With facilities throughout the United States, Elbit Systems of America is dedicated to supporting those who contribute daily to the safety and security of the United States.

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 and radios. (Elbit 22.03)

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10: ISRAEL ECONOMIC STATISTICS

10.1 Israel’s Deflation Continues as CPI Drops by 0.7% in February

The Central Bureau of Statistics announced on 15 March that over the past 12 months, Israel’s CPI has fallen 1.5%, and it is down 1.6% since the start of 2015. Deflation is escalating as the Consumer Price Index (CPI) fell 0.7% in February. Notable price falls in February were in household electrical appliances (9.9%), fuel and oil for vehicles (3.2%), Internet and telecom services (2.7%), overseas travel (1.9%), and footwear (3.1%). There were notable price rises in rents (0.2%), and fresh fruit (4.2%). Last month the Bank of Israel unexpectedly cut the interest rate by 15 basis points to a historic low of 0.1%. The question now arises if the Bank of Israel will follow the European Central Bank and lower the rate into negative territory. (CBS 15.03)

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10.2 Bank of Israel Report Reveals Israeli Public Pays NIS 7.4 Billion for Health Care

Israelis pay NIS 7.4 billion a year on private or supplemental health insurance, a report released by the Bank of Israel on 24 March found, noting these expenses are on the rise. The national health expenditure in 2012 was NIS 73.9 billion, a sum equal to 7.5% of Israeli GNP. The health system in Israel still based mainly on public funding and on public health services, but the share of private insurance is only increasing, but not necessarily to either the public or the system’s benefit. About a third of the national health expenditure is invested in businesses that provide private health services seeking to make a profit. This business sector of health services includes independent doctors, private pharmacies, private dentists and medical examination institutes. This sector includes institutes operating with a license from the Health Ministry such as private hospitals, surgical clinics and dialysis institutes. Before tax deductions, these private health providers made NIS 123 million in 2012 – only 0.2% of the total national health expenditure. Almost 7% of these private providers’ business came from medical tourists.

Israeli citizens pay NIS 3.25 billion a year in deductible fees to the different HMOs for services that are included in the healthcare basket. An additional NIS 1.2 billion comes from citizens who pay for long-term hospitalization.

The Bank of Israel report states that a share of private funding, which includes funds citizens pay directly out of their own pockets for services as well as income from medical tourists, is high compared to other countries, and has increased over the years. In 1995, private funding was 31.7% of the total national health expenditure, while in 2013 it leapt to 39.7%. The report also noted that while private healthcare pays patients back for up to 60% of their expenses, three of Israelis major HMOs (Maccabi, Leumit and Mehuhedet) had a combined deficit of NIS 421 million, with only Clalit having a profitable year. The reason is the private health care, which functions in addition to regular HMOs, pay Israelis back 83% of their premium costs, effectively draining funds from the HMOs.

The Bank of Israel noted that in 2010, the per capita investment in health was $71, less the half of the OECD overage ($139). Israel also lags behind in average hospitalization length – with 4.3 days per capita as opposed to the OECD average of 6.3. (BoI 24.03)

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10.3 Israelis Bought 2.85 Million Smartphones in 2014

Smartphone sales in Israel rose 19% in 2014 to 2.85 million from 2.4 million in 2013, according to IDC Israel research. Smartphone sales in Israel were unstoppable last year, rising 19% to 2.85 million from 2.4 million in 2013. This figure is surprising considering that smartphone prices have not gone down and Israeli consumers spend an average of NIS 3,000 – 4,000 on their smartphones. Israelis also bought 460,000 regular mobile phones last year. However, there were no surprises about which were the most popular models – the Samsung Galaxy and the Apple iPhone. Information provided by the mobile carriers shows that the two single most popular models were the iPhone 6 and the Galaxy S5, followed by the Galaxy S4, iPhone 5S and LG’s G3.

Samsung led the Israeli market in 2014 with a 35.5% market share (up from 34% in 2014), Apple had a 31% market share (up from 28% in 2013), LG had a 14% market share (up from 7% in 2013), HTC had a 4.5% market share (up from 4% in 2013) and Sony had an 3.5% market share (down from 8.5% in 2013). Alcatel saw its market share fall to 3.5% last year from 7.5% in 2013. Some 60% of Israelis still buy their smartphones from the mobile carriers, although an increasing number of Israelis buy their devices from private stores or from abroad via the internet. (Globes 12.03)

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10.4 Operation Protective Edge Cost Israel’s GDP NIS 3.5 Billion

In its annual report for 2014, the Bank of Israel announced that the loss of GDP deriving from Operation Protective Edge is estimated at around NIS 3.5 billion, about 0.3% of annual GDP. The Gaza conflict was fought for 50 days in July and August 2014. The Bank of Israel said, “This negative impact was caused by the demand side, while the supply side maintained relative stability.” The decline in demand negatively impacted tourism services and private nondurable consumption. The negative impact on tourism is characteristic of military conflicts, though the decline in nondurable goods consumption was unusually formidable. On the supply side, Israel’s economy was more resilient than in previous conflicts, as indicated by the stability in export data and in the Industrial Production Index.

The Bank of Israel estimated that the loss suffered by tourism services exports in 2014 due to Operation Protective Edge reached NIS 2 billion, about 0.2% of annual GDP. The GDP loss attributed to private consumption was estimated at about NIS 1.5 billion, most of which derived from a decline in services consumption and a minority of which derived from a slowdown in the growth rate of food, beverages and tobacco consumption. Private consumption recovered nearly immediately, and the negative impact was entirely in the third quarter. (BoI 16.03)

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10.5 Petah Tikva is Israel’s Top Export City

The city of Petah Tikva is Israel’s main exporter, according to the first survey by the Ministry of the Economy Foreign Trade Administration. The survey shows that companies operating in Israel’s oldest city account for 17.2% of Israeli exports, excluding diamonds, with 1,540 exporters operating in the city. Haifa is in second place with 700 exporters and 15.6% of outgoing Israeli goods, followed by Ashkelon with 560 exporters and 12.7% of exports. Figures published by the Israel Export and International Cooperation Institute show that exports of goods and services from Israel totaled $96.7 billion in 2014, up 3%, compared with 2013. The analysis of the distribution of exporters by the Ministry of the Economy puts Tel Aviv in fourth place with 10.2% of Israeli exports. At the same time, from a regional perspective, Tel Aviv and the central region account for the largest proportion of exports – 43.5%. 7,900 exporters operate in the central region, 31 of which are considered major exporters with over $100 million in exports a year. Israel’s fifth biggest exporting city is Beer Sheva with 7.9% of Israeli exports. 404 exporters operate in Beer Sheva, seven of which are considered major exporters. (Globes 22.03)

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11: IN DEPTH

11.1 LEBANON: Ambitious Solar Project Promises More Electricity for Lebanon

Raghida Haddad posted on 15 March in Al-Monitor that a field stretches by a river, but it does not produce fruits and vegetables. It features, however, devices that produce electricity from the sun. A blue expanse of solar panels covers the Beirut River between the Armenia Bridge and Yerevan Bridge in Bourj Hammoud. This solar field now has 1 megawatt of capacity, and is estimated to guarantee 1.6 million kilowatt-hours (kwh) per year, fulfilling the needs of around 1,000 homes.

The field is estimated to prevent the emission of around 1,000 tons of carbon dioxide annually. Implementation is nearing completion: 3,600 solar panels have been built on a structure of concrete girders extending across the river with steel supports — 325 meters (about 1,066 feet) long and 32 meters (about 104 feet) wide — that form a “suspension bridge” without any obstruction to the flow of the river. The solar field is expected to connect to the public network in May 2015 through a transformer and without storage. The beneficiaries of the energy produced will primarily be the people of Bourj Hammoud, who will experience a sense that they own exceptional clean energy produced by the river that passes through their area.

This is the first stage of the project — called the “Beirut River Solar Snake” — which is part of the national project for energy self-sufficiency being pursued by the Lebanese Center for Energy Conservation (LCEC), which was approved by the parliament in November 2011. The project’s ultimate goal is to produce 10 megawatts from solar fields extending 6 kilometers (3.7 miles) over the river in around 5 years, to meet the needs of 10,000 homes. The Ministry of Energy and Water has guaranteed $3 million of funding for the first stage. It is hoped that with the beginning of the second stage, between 1 and 2 megawatts will be produced in 2015. According to the budgeting plan, each stage will be funded by the value of electricity produced in the previous stage.

Is Lebanon, the country with 300 sunny days a year, really proud of 1 megawatt of solar energy, though?

Pierre El Khoury, the director of the LCEC, said that the importance of the Beirut River Solar Snake is not in its material value alone, but also in its encouragement of the solar market. Since the project’s implementation began in late 2013, photovoltaic systems have been assembled in Lebanon that amount to a capacity of 30 megawatts in the private sector, in factories, schools, hospitals and elsewhere.

Phoenix-ASACO was contracted to execute the project as it was the one to bid the lowest price. The 12 companies that participated in the bid are presently working on installing the photovoltaic cells to produce electricity with solar energy. Khoury expects that between 200 and 300 additional megawatts will be produced by 2020, if the private sector opens the gate to the production of solar electricity, and if that production is connected to the Lebanese electrical company’s network (Electricité du Liban). In April 2014, parliament approved a law, which the government is now creating mechanisms to implement, to allow the government to give licenses to produce electricity based on the recommendation of the Ministry of Energy and Water and the Ministry of Finance. This suggestion has been made, and it is now being discussed. As for maintenance, the most important thing is cleaning dust off the solar panels, which will be done with hoses. Panels that break for whatever reason will also be replaced. A 3 meter (9.8 foot) fence will be installed on the banks of the river to prevent anyone from reaching the panels, with permanent guards and cameras monitoring the whole solar field.

The “solar river” will not only be for electricity production. Those involved in the project hope it will become an “oasis of civil organization” through a future plan to create a public park that focuses on the spread of ideas about renewable energy and self-sufficiency, and the construction of a path to cross the “solar bridge” that divides Beirut and Mount Lebanon in Bourj Hammoud, the widest river bridge in Lebanon. A sign will be erected that shows the amount of electricity produced at different times, the amount of carbon emissions that are avoided and the environmental benefits of the project.

Khoury added excitedly, “The value of the project is also that it is the first solar field in the world located above a river.” Such a project could be implemented on a canal in Aqaba and India is aiming to implement a plan to install solar fields over its canals. He indicated that a project for a solar field is coming in the Zahrani area, where the tapline refinery has been defunct for many years. The facilities there are used to hold fuel, and there is a wide area of land that belongs to the Ministry of Energy on which a solar field can be built with funding from oil facilities. The goal is the production of 1 megawatt in the first stage, with 2 megawatts to be added after connection to the network of the Lebanese electrical company. Nine suggestions were made, and a company will be chosen to implement this project soon and work is expected to begin in May 2015. The price will be lower and the implementation quicker than the Beirut River Solar Snake project, since the solar field will be located on the ground without the need for the extension of bridges above water. The first stage can be completed before the end of 2015. A problem in Lebanon could be the lack of land, but there is public property upon which solar fields can be created. The country must not be treated as if it is real estate only for sale that cannot be used for public interest. The commons must be used for the benefit of people, and not for sects and those with influence. (Al-Monitor 15.03)

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11.2 JORDAN: IMF Mission Reaches Staff-Level Agreement on Sixth Review

A mission from the International Monetary Fund (IMF) visited Amman from 24 February to 10 March to conduct the sixth review of Jordan’s economic performance under the Stand-By Arrangement (SBA) approved in August 2012. The IMF issued the following statement:

“In view of the Jordanian authorities’ commitment to economic reforms and efforts to preserve macroeconomic stability amid external challenges, the IMF team and the Jordanian authorities reached a staff-level agreement on policies that can lead to the completion of the sixth review under the SBA. The agreement is subject to the approval of the IMF Executive Board. The completion of this review would allow for the disbursement of SDR142.083 million (about $200 million).

“Jordan’s economy is withstanding a difficult regional environment – most notably, the conflicts in Syria and Iraq, and the resulting high cost of hosting refugees, disruptions to trade routes, and pressures on security spending. Growth has gradually increased to an estimated 3.1% in 2014, supported by construction, mining and agriculture. Inflation dropped to 0.2% year-on-year in January, helped by lower global commodity prices. The current account deficit, excluding grants, narrowed to 12.1% of GDP in 2014 from 17.1% in 2013, despite disruptions to gas imports from Egypt and a decline in exports to Iraq.

“Program performance has stayed broadly on course. The central bank’s international reserves have continued to over-perform relative to program targets. The government budget has been well managed. Nonetheless, the fiscal deficit is estimated to have slightly exceeded the 2014 target owing to revenue shortfalls – the latter brought about by subdued activity in sectors that generate much of the tax revenue. The electricity company NEPCO incurred some additional losses because of shortfalls in gas flows from Egypt. There has been progress on the structural side: a preliminary license was granted to the first private sector credit bureau, and efforts are ongoing to bolster cross-border bank supervision and enhance the efficiency of public capital spending.

“Turning to 2015, Jordan’s economy will benefit from lower oil prices, including through reductions in the energy import bill and the current account deficit, which – excluding grants – is forecast to decline to 10.6% of GDP in 2015. Savings from oil consumption will boost domestic demand, helping to increase growth to close to 4% this year. The impact on the combined deficit of the central government and NEPCO will also be positive. This saving, together with a prudent 2015 budget, the recently approved income tax law, and other measures can help put public debt firmly on a downward path from 2016 onward. At the same time, international reserves are expected to stay at comfortable levels.

“Regarding the medium term, discussions focused on the need to persevere with Jordan’s program of reforms. Much has been achieved to date, and the decline in oil prices has given a welcome boost to Jordan’s adjustment efforts. Monetary policy will continue to preserve monetary stability and maintain the attractiveness of the dinar. Because Jordan’s public debt remains very high, there is a need to steadfastly adhere to the planned public sector adjustment, including continued deep tax reform and sustained implementation of the medium-term energy strategy.

“At the same time, a more ambitious structural agenda is needed to promote stronger growth and employment. Of particular importance are policy changes to: put unemployed youth into jobs by helping them acquire skills needed for the private sector; increase the participation of females in the labor force; re-examine public sector hiring and compensation; make Jordan more attractive to investment by improving the business environment; and strengthen public institutions, including through better tax administration and public financial management. Jordan’s 10-year framework of the economic and social policies ‘Vision 2025’, currently under discussion, could provide the framework for such reforms. It could also become a framework for continued donor support to not only help cover the cost of hosting the Syrian refugees but also increase capital spending so as to build the basis for high, sustained, and inclusive growth.” (IMF 18.03)

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11.3 IRAQ: IMF Staff Concludes the 2015 Article IV Mission for Iraq

An International Monetary Fund (IMF) mission visited Amman from 6 to 15 March to conduct the 2015 Article IV Consultation discussions with the Iraqi authorities. At the conclusion of the visit, the IMF issued the following statement:

“The Iraqi authorities are taking proactive steps to address the double shock of the Islamic State of Iraq and Syria (ISIS) insurgency and the collapse in oil prices, which have hit the economy hard. These efforts have led to the swift approval of a streamlined 2015 budget, based on encouraging progress towards a permanent agreement between Baghdad and the Kurdistan Regional Government (KRG) on oil exports from the north.

“The ISIS insurgency has not halted the expansion of the oil sector from all oil-producing regions. Exports are expected to rise from 2.5 million barrels per day (mbpd) in 2014 to 3.1 mbpd this year, benefiting from the agreement with the KRG. Nevertheless, due to the decline in economic activity in the areas occupied by ISIS and stagnating government spending, GDP growth is estimated to have contracted by over 2% in 2014 and is projected to recover to just over 1% this year. Inflation outside ISIS-occupied areas is low, at less than 2% at end-2014, but may rise following the ongoing enforcement of higher custom duties.

“International reserves of the Central Bank of Iraq (CBI) have declined from $78 billion at end-2013 to $66 billion at end-2014 because of the decline in oil revenues and the high level of imports. The level of international reserves at end-2014 reflects the $0.7 billion balance of the Development Fund for Iraq, which was moved to the CBI in Baghdad in May. Therefore, total foreign assets fell from $84.3 billion to $66 billion in the course of last year.

“The external shock, combined with security and humanitarian spending pressures, is weighing on fiscal performance. In 2014, the fiscal rule triggered by the lack of an approved budget helped contain spending below 2013 levels. As a result, the budget deficit is estimated at about 3% of GDP (from 6% of GDP in 2013). However, this outcome was partly due to the postponement of investment spending, and the suspension of the budget transfer to the KRG. Arrears to the international oil companies were also accumulated. The deficit has been mostly financed by domestic borrowing from state-owned banks.

“The 2015 budget, assuming exports of 3.3 mbpd and a price of $56 per barrel, includes increases in non-oil taxation and strives to contain spending, for example through compulsory savings on wages of civil servants. Nevertheless, due to the large fall in oil revenues, it still envisages a deficit of about 12% of GDP. Under more conservative oil revenue assumptions, and taking into account unbudgeted payments to international oil companies, the deficit may well reach much higher levels. To address this downside risk, the government is committed to under-execute budget spending as needed through rigorous cash management, the rationalization of capital investment, and the postponement of some investment projects.

“However, further fiscal consolidation through revenue and spending measures will be needed to contain the 2015 deficit to a level consistent with financing constraints, alleviate pressure on the domestic banking system and tighten domestic demand to contain the decline in international reserves. Consolidation measures should be permanent to underpin medium-term fiscal and external sustainability, which would be particularly important because of the weak oil price outlook.

“The foreign exchange market has remained stable in 2014 following steps taken by the CBI to liberalize it, and the parallel market spread had declined to 3.5% at the end of the year. However, the authorities should reconsider the caps on CBI foreign exchange sales and the collection of custom duties through commercial banks. These measures are effectively restricting the supply of foreign exchange to the Iraqi economy and have boosted the parallel market rates to record levels in the past weeks.

“Aware of the importance of the financial system for development of the private sector and growth, the authorities are pressing ahead with the restructuring of state-owned banks Rasheed and Rafidain. They are also taking steps to open government business to private banks, and introduce key elements of the financial system infrastructure, such as a deposit guarantee scheme and a credit bureau.

“Achieving inclusive and diversified economic growth over the medium term will also depend on a wide set of reforms, encompassing state-owned enterprises, the energy sector, and the labor markets, and improvements in the business environment and governance.

“The mission indicated that the IMF stands ready to support the Iraqi authorities through stepped up policy engagement, technical assistance, and, if needed, financial support. (IMF 18.03)

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11.4 EGYPT: Egypt, Sudan & Ethiopia Approach Resolution of Nile Dam Crisis

Ayah Aman posted on 11 March in Al Monitor that when the late Ethiopian Prime Minister Meles Zenawi laid the foundation stone of the Grand Ethiopian Renaissance Dam (GERD) in April 2011 in the wake of the January 25 Revolution, he marked the beginning of a long standoff between Cairo and Addis Ababa and much instability and chaos in Egypt. The conflicting parties decided in 2014 to return to the negotiating table in a bid to overcome their differences and disagreement about the risks the GERD poses to Egypt’s water security. The first Malabo meeting, which took place in August 2014, addressed the technical aspects of the issue.

On 3 March, the foreign and water ministers of the Eastern Nile countries of Egypt, Sudan and Ethiopia held three days of closed negotiations in the Sudanese capital of Khartoum. The three countries reached a preliminary consensus on a trilateral political and technical agreement on water use in the Eastern Nile basin and the risks from the GERD. The plan’s contribution to ending the conflict on the Nile waters is uncertain, as many issues remain, such as the dam’s negative impact on Egypt.

Following the talks, Egypt’s Minister of Water Resources and Irrigation Hossam Maghazi said in a 6 March press statement, “The document relates to Egypt’s and Sudan’s concerns regarding the Ethiopian Renaissance Dam. The document is seen as a positive step forward, which will be followed by other steps once it is referred to the presidents of Egypt, Sudan and Ethiopia for review and ratification.

Meanwhile, the representatives in the negotiations refused to disclose to the media any details about the agreement until it is submitted to the presidents.

Egypt is changing its policy regarding the GERD issue, toning down its rhetoric on the international level and heading toward reconciliation and dialogue with Ethiopia. It seeks to appease fears about the dam’s impact on Egypt’s annual share of the Nile River, estimated at 55.5 billion cubic meters under the 1959 agreement for the utilization of the Nile waters. Yet, Egypt’s concerns continue about finding a diplomatic solution to preclude any risks resulting from the dam without conflicting with Ethiopia’s plans to complete its construction.

Egyptian President Abdel Fattah al-Sisi met with Ethiopian Prime Minister Hailemariam Desalegn for the first time on 26 June 2014, on the sidelines of the African Union summit in Equatorial Guinea.

The Malabo declaration was subsequently issued and included seven items providing for water management in the eastern Nile basin between Cairo and Addis Ababa, and defining the relations between the two countries in regard to the utilization of the Nile waters.

During the 2014 meeting, a political and a technical approach were agreed upon to resolve the outstanding problems from the dam, mainly the dam’s negative impact on water flow into the Aswan High Dam, its negative environmental impact and the energy generated by the dam. According to a well-informed source who spoke to Al-Monitor on condition of anonymity, “It was necessary to push forward negotiations on the political level, as the results of technical meetings have yet to be implemented.”

The source added, “Although negotiations have been productive yet difficult, we are still waiting to see the results of the document that was agreed upon in Khartoum. It included for the first time items dealing with Ethiopia’s policies to fill the storage reservoir attached to the dam lake and operational mechanisms to this effect.”

Egyptian officials attach great significance to issues relating to the “storage lake” and the dam’s operational mechanisms. A tripartite technical committee was formed following the Khartoum negotiations held in August 2014 to resolve outstanding technical issues concerning GERD’s risks on Egypt and Sudan’s water security, based on a six-month road map. However, the committee has yet to make technical recommendations on the subject.

Another source involved in the work of the tripartite technical committee told Al-Monitor on condition of anonymity, “For the moment, the committee is only concerned with selecting an international consulting firm to study the dam’s environmental hydraulic and economic effects on Egypt and Sudan, without considering the operation policies or issues relating to the dam’s size and capacity.”

While Ethiopian officials continue to emphasize that the dam is an Ethiopian national project and that Ethiopia is not seeking to start a partnership with Egypt, Desalegn said in a press statement in Khartoum at the conclusion of the talks, “The document is a step to take the tripartite partnership to higher levels.”

Adel Nabhan, a researcher in the Nile Basin file, told Al-Monitor, “The negotiations have once again demonstrated Egypt’s failure in managing this issue. The Egyptian government failed to reach a quick solution as the construction work is ongoing at the dam, while the Ethiopian administration did not agree to suspend them temporarily until studies and reports produce final results on the dam’s effects on both countries.” He added, “If the recent agreement truly included special provisions on the dam’s operation policies and filling the storage reservoir, this means that Egypt agreed to its completion without considering its potential risks.”

Meanwhile, the former head of the Nile Water Department at Egypt’s Ministry of Water Resources and Irrigation, Mohammed Abdel Aty, told Al-Monitor, “The [semi-formal] preliminary document, which was drafted according to international standards and agreed upon by the ministers of foreign affairs and agriculture, is the best way to settle the dispute, especially in light of the slow process to find technical solutions to this effect.”

Abdel Aty added, “A genuine agreement akin to the 1959 agreement between Cairo and Khartoum could be reached, should there be a true, strong political will. However, things are now standing at the level of a memorandum of understanding or a letter of intent.”

Following the negotiations in Khartoum, the issue was referred to the presidents of Egypt, Sudan and Ethiopia for review and ratification. However, the three countries have no other choice but to cooperate, as the dam has now become a reality. (Al-Monitor 11.03)

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11.5 TURKEY: Turkey and the KRG: An Undeclared Economic Commonwealth

Soner Cagaptay, Christina Bache Fidan and Ege Cansu Sacikara wrote in The Washington Institute for Near East Policy’s PolicyWatch 2387 on 16 March that for the long-term benefit of both, Ankara and Erbil share a strong interest in maintaining their partnership.

In 2007, at the nadir of Turkish-Kurdish ties, the Kurdistan Regional Government (KRG) of Iraq made a strategic decision to pivot to Turkey. The Iraqi Kurds envisioned Turkey as their future ally against Iran, Syria and the Iraqi central government. At the time, Turkey had a hostile attitude toward the KRG mainly because the Kurdistan Workers Party (PKK) had bases inside the KRG and the terrorist group would launch attacks into Turkey. Nevertheless, Turkey reciprocated the KRG’s overture, eventually taking the economic steps of sending merchants, airlines and goods. Booming economic ties have since changed the overall tenor of Turkish-Kurdish relations. Eight years after the pivot, Turkey is in peace talks with the PKK, Ankara provides the KRG with weapons against the Islamic State of Iraq and al-Sham (ISIS), and, perhaps most important, Turkey and the KRG share an undeclared economic commonwealth.

Drivers of the Turkey – KRG Commonwealth

Since 2007, Turkish companies have capitalized on the close proximity of the Iraqi market and pent-up consumer demand in the KRG. At the same time, the trans-border mercantile culture of the Turks and Iraqi Kurds and the availability of experienced local small and medium-size enterprises (SMEs), dating to the oil-smuggling and sanction-busting days of the Saddam Hussein regime, helped facilitate trade. The KRG’s determination to establish a business- and investment-friendly climate, coupled with the Turkish private sector’s entrepreneurial spirit and normalized relations between Ankara and Erbil, resulted in significant economic cooperation.

The KRG: Turkey’s Third Largest Export Market

Turkish exports to Iraq, including goods re-exported from the area governed by the KRG to the rest of Iraq, have increased significantly over the last decade. In 2007, according to estimates based on total Turkish exports to Iraq, exports to the area governed by the KRG stood at $1.4 billion, making the KRG Turkey’s nineteenth largest export market. In 2011, the KRG became Turkey’s sixth largest export market, with exports of $5.1 billion. By 2013, thanks to $8 billion in Turkish exports, the KRG had risen to become Turkey’s third largest export market. By comparison, excluding oil and gas, Iraqi exports to Turkey — and, by extension, KRG exports — have been negligible, ranging from $87 million to $153 million between 2007 and 2014.

Turkish Companies Dominate KRG’s Strategic Business Sectors

During his April 2012 visit to Turkey, KRG minister of trade and industry Sinan Celebi pointed out that twenty-five new Turkish companies were launched every month in Iraqi Kurdistan, with more than half of foreign companies registered in the KRG being Turkish. In 2009, around 485 Turkish companies were operating in the KRG; by 2013, that number had increased to about 1,500. Turkey’s business presence is visible, more than that of any other country throughout the area governed by the KRG. From shopping centers to housing projects to furniture stores and ubiquitous consumer and commercials goods, Turkish trademarks are to be seen everywhere in the KRG-governed area governed. As highlighted in the accompanying infographic, Turkish companies are engaged in a wide range of sectors, including agriculture, banking and finance, construction, education, electrical power systems, health care, oil/gas extraction and services, telecommunication, transportation, tourism and the water industry.

Increased Visits

The movement of people between Turkey and the KRG highlights the region’s interconnectedness. Most of this movement originates in Turkey, with the number of Turkish citizens entering Iraq steadily increasing since 2006, when the figure stood at 481,371. In 2010, 1,298,319 Turkish citizens entered the KRG through the Habur Gate, the sole border crossing between Turkey and KRG, with the figure staying about the same in 2013. Turkish citizens tend to travel to the KRG mostly for business, whereas Iraqi Kurds travel to Turkey for leisure and medical treatment, as well as business.

Increased Flights

The number of flights between Turkey and the KRG further demonstrates the increased exchange of people between the two regions over the last decade. Construction of Erbil International Airport was begun in 2004 by two Turkish companies, Mak-Yol Construction, Industry, Tourism and Trade and Cengiz Holding, and the airport opened to domestic and international traffic in 2010. The construction of a third international airport in the KRG, Duhok International Airport, with a total budget of $450 million, commenced in 2012. The joint venture, carried out by the same two Turkish companies involved in the Erbil airport, along with the Korean Incheon International Airport Corporation (IIAC), is scheduled to open by early 2016. Recently, however, the financial impact of fighting a war against ISIS has forced the KRG to suspend segments of the project.

Six airlines fly between Turkey and the KRG: Atlas Global, Iraqi Airways, Onur Air, Pegasus Airlines, Turkish Airlines and Zagros Air. Based on information collected from the airline websites, the airline market analysis firm CAPA, media articles, and airports’ flight schedules, in 2014 at least seventy-eight weekly flights operated between Turkey and the area governed by the KRG during the summer high flying season. This number has increased considerably from 2007, when flights between the two regions were nonexistent, and 2011, when only forty flights were scheduled.

Conclusion

Ankara and Erbil are both committed to developing infrastructure within the KRG, thus further deepening economic interdependence. Building an industrial zone along the Iraq-Turkey border, two more border crossings, additional oil and gas pipelines, airports, and upgraded highways will signal growing cooperation and promote long-term economic stability within the region. Turkey, which imports 95% of its oil and natural gas consumption, now buys three-quarters of its gas and oil from Russia and Iran and wants to decrease its energy dependence on both countries. Turkey’s determination to diversify its oil and natural gas sources, aimed at averting disruptions that could cripple the Turkish economy, serves as a major incentive to deepen relations with the KRG. Despite past relations characterized by suspicion and disdain, Turkey and the KRG share a strong interest in maintaining their economic partnership for the long-term socioeconomic benefit of both.

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Soner Cagaptay is the Beyer Family Fellow and director of the Turkish Research Program at The Washington Institute, and author of “The Rise of Turkey: The Twenty-First Century’s First Muslim Power” (http://bit.ly/ZI45JV), named by the Foreign Policy Association as one of the ten most important books of 2014.

Christina Bache Fidan is a PhD candidate at the University of Warwick and a research fellow at the Center for International and European Studies at Kadir Has University in Istanbul.

Ege Cansu Sacikara is the Yvonne Silverman Research Assistant at the Institute. (TWI 16.03)

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11.6 GREECE: ‘B-/B’ Ratings Remain On CreditWatch Negative

Overview

• We consider that, at least for the short term, there are uncertainties around Greece successfully concluding a funding agreement with its official creditors.
• We also believe that the Greek government’s liquidity position is increasingly stretched, requiring additional funding commitments in the second quarter of 2015 to allow for continued timely payment of Greece’s financial obligations.
• Moreover, we believe that the lack of a clear short- and long-term funding plan and the related political uncertainty weigh on GDP recovery prospects and tax compliance, and increase the risk of significant deposit outflows.
• As a consequence, we are keeping our ‘B-/B’ long- and short-term ratings on Greece on CreditWatch negative.

Rating Action

On 13 March, Standard & Poor’s Ratings Services said that its ‘B-/B’ long- and short-term sovereign credit ratings on the Hellenic Republic (Greece) remain on CreditWatch with negative implications where they were placed on 28 January.

Rationale

We consider that the 24 February agreement in principle between Greece and the Eurogroup (the 18 other eurozone finance ministers) on the extension of the Master Financial Assistance Facility Agreement until end of June 2015 has not addressed how Greece’s funding needs will be met in the coming months. The Greek government and its official creditors appear to have a divergence of views regarding the appropriate policy concessions necessary for further official funding. At the same time, we consider it highly unlikely that Greece will regain market access to alternative funding sources in the coming months. We believe that an agreement between Greece and its creditors is a precondition for Greece mitigating its rising liquidity risks.

Between March and June 2015, the Greek government is required to make principle payments of €4.6 billion on its long-term debt, mainly to the International Monetary Fund, and €1.9 billion of interest payments. In parallel, it is facing €11.6 billion of treasury-bill redemptions, in a context where foreign investors have largely exited the market, and where the European Central Bank (ECB) has limited the amount of treasury bills (about €3.6 billion) to be accepted for Emergency Liquidity Assistance refinancing operations currently provided by the central bank of Greece. Greek government securities remain excluded from the Eurosystem’s regular channels of liquidity provision, as well as from the ECB’s “Quantitative Easing” bond purchasing program. Furthermore, Greece’s funding needs appear to be rising on the budgetary side: A cumulative shortfall of receipts of €2.5 billion in January and February alone is putting the sustainability of the general government primary budget surplus at risk.

In that context, we believe the coverage of the short-term funding needs may necessitate the accumulation of domestic arrears with suppliers and tapping into cash reserves of public institutions. Drawdowns on the €10 billion (as of January 2015) of central government deposits in the Greek banking system (including €3.4 billion at the central bank) are also possible. We understand that €4 billion of these deposits are liquid on demand. However, we are mindful that a large deposit withdrawal by the government could add to liquidity stresses at Greek financial institutions if not accompanied by increased liquidity provision by the Eurosystem.

Beyond this short-term liquidity challenge, we believe there is considerable uncertainty over the prospects for a multiyear officially funded program to cover Greece’s funding needs beyond the first half of this year. Overall, in 2015, government funding needs should total about €21 billion, including more than €16 billion of redemptions on long-term debt and under the assumption of a budget primary surplus of 1.2%. In 2016-2018, we expect funding needs to diminish to €10.6 billion a year on average, given reduced redemptions but assuming a primary budget surplus of about 1% of GDP. We consider that a 1% budgetary surplus is possible only if Greece’s economic recovery is sustained and the recently observed dip in tax compliance in early 2015 can be reversed.

We believe that lack of clarity on funding over the short and medium term and related political uncertainty could increasingly weigh on Greece’s economic recovery and fiscal position. A key risk remains the possibility of a renewed intensification of pressure on the banking system’s liquidity position. Between end-November 2014 and end-January 2015, Greek banks reportedly faced cumulative deposit outflows of about €18 billion, which was approximately one-tenth of the system’s deposit base in November 2014.

We still expect the growth trend that emerged last year to be confirmed in the second half of 2015, assuming that an agreement between Greece and its creditors can be reached and that such an agreement would help boost market confidence.

Although the debt-to-GDP ratio was a very high 176% at year-end 2014, other features of Greece’s public debt profile are less onerous. These other features include its unusually long debt maturities–16.2 years for the total stock at year-end 2014 and 30 years on official bilateral financing and financing from the European Financial Stability Facility–and their low effective nominal interest rate, which we estimate is currently about 2%. Including concessional interest rates, Eurosystem retroceded interest earnings, and the interest rate grace period on official debt, we estimate Greece’s general government interest at year-end 2014 at less than 3% of GDP.

A Greek exit from the eurozone is not our base-case scenario. We are of the view that the economic, social, and political ramifications for Greece of such an unprecedented step would be severe and would likely be accompanied by a payment default by Greece on both its official and commercial obligations. Early signs of heightened eurozone exit risk could include capital controls and bank deposit withdrawal limits, as well as a cash-strapped government issuing IOUs to pay employees, pensioners, and suppliers. These IOUs could circulate as a secondary means of exchange and, over time, lead to a national currency, which could operate as sole legal tender in Greece after potential government legislation to redenominate its financial obligations where legally possible.

We note that our sovereign ratings pertain to a central government’s ability and willingness to service financial obligations to commercial creditors, which in Greece’s case hold an estimated 20% of its total debt stock, excluding ECB and other official creditor holdings of bonded debt. Debt redemptions owed to the private sector total less than €500 million in 2015 and €1.09 billion in 2016, less than 0.3% and 0.6% of GDP, respectively, well below redemptions Greece owes to its official creditors.

A missed payment to an official creditor would not constitute a trigger to lower the rating to ‘SD’ (selective default) under our criteria, although, other things being equal, it would likely constitute a negative factor in our analysis. Only a missed payment to a commercial creditor would constitute a default under our criteria. The Greek government has repeatedly committed itself to excluding private-sector creditors from any further debt re-profiling, although we consider the incentives for another restructuring could shift if the sovereign debt crisis intensifies.

Creditwatch

We aim to update or resolve the CreditWatch within the next two months, by which time we believe Greece’s funding plans will be clearer.

We could lower the rating if we perceive that the likelihood of a distressed exchange of Greece’s commercial debt will increase further. This could be the case if, for example, we took the view that further official creditor disbursements would remain elusive, resulting in the Greek government’s inability to honor all its financial obligations in full and in a timely manner.

We could affirm our sovereign rating on Greece if we believe that a new financial support program will be agreed with policy conditions that satisfy both the political priorities in Greece and the creditor countries. Such a scenario could contribute to promoting political stability, tax compliance, and a gradual economic recovery. (S&P 13.03)

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11.7 GREECE: SYRIZA Trapped as April Deadline Approaches

Time is running out for Greece and its official creditors, according to new analysis released today by IHS, a leading global source of critical information and insight. With no access to bond markets and increasing funding pressures, Greece desperately needs official funds to avoid a default and the coalition government may be choosing between its survival and economic collapse.

“The SYRIZA-led coalition is trapped between a rock and a hard place,” said Diego Iscaro, senior economist at IHS Global Insight in an IHS briefing at its Parisian headquarters. “Even if an agreement is reached, there will continue to be significant uncertainty regarding SYRIZA’s ability and willingness to comply. Moreover, the stability of the SYRIZA-led coalition may be compromised if the government ends up giving up on many of the promises made before the election.”

Chance of Greece not reaching a deal: 40%

IHS believes that there is a 40% chance of a deal not being reached by the end of April. Although both parties are likely to reach a deal, the confrontational tactics used by the SYRIZA government and its lack of experience mean that a collapse in the negotiations should not be discarded. Pension, VAT and labor reforms will all present difficult challenges for negotiations. Rising tensions between Greece and Germany, the new government’s lack of experience, and relaxed markets are all reasons to be concerned about Greece’s ability to agree and implement reforms.

A failure to obtain official funds would surely result in Greece entering a default, possibly as soon as the second quarter of 2015. If this scenario materializes, Greece’s Eurozone membership will be in jeopardy. If Greece enters a default, the European Central Bank (ECB) is expected to stop its support for the financial sector. “Without the ECB’s support for its banks, the economy would suffer an acute shortage of liquidity,” Iscaro said. “A Eurozone exit could become the only alternative for Greece.”

Greece’s production structure shows no benefit from Grexit

Greece’s economic structure suggests that the economic benefits from leaving the Eurozone will be limited. Greece’s manufacturing base is shallow, while the share of manufacturing and tradable services in the economy is below 25% of the economy. Moreover, even if the nominal exchange rate depreciates, it is likely that higher inflation will more than counterbalance the impact of the weaker currency on the real exchange rate. This suggests that Greece’s cost competitiveness position may not improve as much as desired under a Greek exit scenario.

Firewalls to contain impact

If Greece ends up leaving the Eurozone, IHS estimates the impact on the rest of the area will be limited by the firewalls put in place in recent years, such as the European Stability Mechanism (ESM) and, in particular, the ECB’s outright monetary transactions. The impact of a Greek exit on bond markets will also be dampened by the recently announced quantitative easing program. However, it is also likely that markets will question the future Eurozone membership of countries where anti-austerity parties gain in popularity. These concerns will certainly increase if the Greek economy performs better than expected outside the Eurozone.

IHS is a leading source of insight, analytics and expertise in critical areas that shape today’s business landscape. Businesses and governments in more than 150 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. Headquartered in Englewood, Colorado, USA, IHS is committed to sustainable, profitable growth and employs about 8,800 people in 32 countries around the world. (HIS 20.03)

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