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TOP STORIES
TABLE OF CONTENTS:
1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS
1.1 Bank of Israel Governor Sanguine But Cautious on Israeli Banks
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2: ISRAEL MARKET & BUSINESS NEWS
2.1 Herley Industries Acquires Eyal Microwave Industries
2.2 Jazz Technologies Announces Stockholders Approval of Tower Semiconductor Merger
2.3 Majic Wheels Starts Trading on the OTC Bulletin Board
2.4 Google Announces First Israel Based "Google Developer Day"
2.5 Tower Semiconductor Completes Merger with Jazz Technologies
2.6 OpTier Raises $63 Million in Fourth Round of Funding
2.7 Altair Semiconductor Closes $22 Million Series 'C' Funding Round
2.8 Norwest Venture Expands Into Israel
2.9 Jiangxi Province in $200 Million R&D collaboration with Israel
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3: REGIONAL PRIVATE SECTOR NEWS
3.1 Jumeirah to Manage Luxury Resort in the US Virgin Islands
3.2 Bloomingdale's to Open in Dubai in 2010
3.3 Monorail Deal Signed for $5 Billion City of Arabia
3.4 Oman To Invest $5 Billion In Domestic Steel Industry In 2008
3.5 More Affordable Water for Algeria with ERI PX Technology
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4: ISRAEL MACRO-DEVELOPMENTS
4.1 Agritech 2009 Will Focus on Agricultural Solutions to Solve the Global Food Crisis
4.2 Index Finds Israeli Corruption Higher
4.3 Survey Finds 47% of Israelis Unconcerned About Environment
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5: ARAB STATE & PAKISTANI DEVELOPMENTS
5.1 Jordan & US Sign MOU on Bilateral Assistance
5.2 Wind & Hydropower on Order for Iraq's Kurds
5.3 Perceived Corruption Drops Across Persian Gulf
5.4 Persian Gulf Ministers Approve Monetary Union Plan
5.5 Kuwait Prepares $131 Billion Development Plan
5.6 Kuwait inflation Reaches 11.35%
5.7 Bahrain Inflation Rises To 3.3% in August
5.8 Qatar's Economy Expands 61% in Second Quarter To $26 Billion
5.9 Saudi Inflation Not Set To Ease Until 2009
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6: TURKISH, CYPRIOT, GREEK & BULGARIAN DEVELOPMENTS
6.1 Turkey Makes Headway In Fight Against Corruption
6.2 Turkey's Exports Increase By 36.42 % In September
6.3 Cyprus Health Sector Worth €643 Million
6.4 Azerbaijan Suffers $1 Billion Loss From BTC
6.5 Greek Retail Sales Volume Down 2% in July
6.6 Transparency International Finds Corruption in Bulgaria is on the Rise
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7: GENERAL NEWS AND INTEREST
*ISRAEL:
7.1 Israel's Population at Eve of Jewish New Year is 7.3 million
7.2 Fast of Gedaliya Marked on 2 October
7.3 Yom Kippur – Holiest Day in the Jewish Calendar – Falls on 8/9 October
7.4 Sukkot Observed
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8: ISRAEL LIFE SCIENCE NEWS
8.1 CorAssist Proves Efficacy in Animals and Shows 3 Months Safety in Humans
8.2 Ultrashape Introduces a Faster Treatment and Better Patient Experience
8.3 Teva Introduces Nicardipine HCl Injection in US; First Alternative to Cardene I.V.
8.4 Galmed Medical Research Initiates Phase I Study of Aramchol,
8.5 Teva's ProAir HFA, the Market Leading Albuterol Inhaler, Receives New Pediatric Indication
8.6 HealOr Announces $15 Million Investment to Heal Chronic Wounds
8.7 Teva & Kowa Partnership to Create Leading Generic Pharmaceutical Company in Japan
8.8 Applisonix Moves into Production Phase for the Selectif Ultrasonic Hair Removal Device
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9: ISRAEL PRODUCT & TECHNOLOGY NEWS
9.1 Zehu Technologies to Introduces Zehu Authenticator 3.0
9.2 Aladdin eToken Debuts New Generation of Strong Authentication Solutions
9.3 Toronto-Area Police Secure Data & Meet CPIC Regulations With Aladdin eToken
9.4 SiSense Launches Pricing and General Availability of Its Prism Business Intelligence Software
9.5 ImageID Introduces DUAL Technology for Detection of Unlabeled Asset's Location
9.6 Denmark's ELRO Deploys ECI Telecom's Carrier Ethernet Platform
9.7 BackFlip Software Launches Process Communications On Demand
9.8 RADA Signs $6.2 Million Agreement to Deliver Advanced Video Recording Systems
9.9 Gogimon Unveils World's First Internet Search Channel
9.10 RiT Launches SiteWiz V2.0 - Industry's Most Advanced Cable & Asset Management (CAM) Solution
9.11 ECI Telecom to Supply Broadband Access Solutions to PLDT in the Philippines
9.12 Elbit Vision Systems Wins a $500,000 Order With Rolls Royce
9.13 Dune & MorethanIP Release Complete SPAUI & RXAUI Solution for FPGA and ASIC
9.14 Dune Networks Introduces Highest Density 10Gbps Ethernet Carrier-Grade MAC Aggregator
9.15 First Ever IPTV Services in Sri Lanka with Optibase Advanced Streaming Platforms
9.16 ECI Telecom's Hi-FOCuS Series Ranked #1 Broadband Access Platform
9.17 AAI Corporation & Aeronautics Defense Systems Team to Provide Orbiter Unmanned Aircraft
9.18 Commtouch & AXIGEN to Launch Integrated Email Security Product
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10: ISRAEL ECONOMIC STATISTICS
10.1 Israel's Economy Set To Grow 4.5%
10.2 Israeli Inflation Driven by Food Prices
10.3 The Composite State-of-the-Economy Index for August 2008 up by 0.1%
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11: In Depth
11.1 LEBANON: Clear Skies
11.2 KUWAIT: Battling Piracy
11.3 BAHRAIN: Taking Care of Business
11.4 UAE: IMF Report on UAE Anti-Money Laundering & Combating Terrorism Financing
11.5 UAE: Food and Drink Report for Q3 2008
11.6 UAE: Abu Dhabi - Investment Goal
11.7 UAE: Dubai - Export Boom
11.8 UAE: Northern Emirates Port Plans
11.9 EGYPT: Binding Ties
11.10 EGYPT: Growth Threatened
11.11 TUNISIA: Fitch Affirms Tunisia at 'BBB'; Outlook Stable
11.12 PAKISTAN: Moody's Changes Outlook On Pakistan's B2 Ratings To Negative
11.13 TURKEY: Food & Drink Market - Carlsberg Pulls Out
11.14 CYPRUS: Food Dominates Cypriot Manufacturing
11.15 BULGARIA: Pharmaceuticals & Healthcare Report for Q3/2008
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1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS
1.1 Bank of Israel Governor Sanguine But Cautious on Israeli Banks
While Stanley Fischer, governor of the Bank of Israel, expressed confidence in the Israeli banking system, the Bank is nevertheless concerned about the global financial crisis and its effect on the Israeli economy. Fischer and his senior staff are aware that a global economic slowdown, combined with a strong shekel, could together bring about a slowdown in the Israeli economy. However, such an occurrence would also probably bring down inflation, giving the central bank more room to maneuver. The Bank of Israel is now forecasting economic growth of slightly less than 3% in 2009. That is still quite respectable, observed the Jerusalem Post, but less than originally estimated. The Bank believes this reduction, along with the global slowdown, will be enough to lower inflation in 2009. That in turn would allow Gov. Fischer to lower interest rates now. However, the Bank's interest rate policy will also be heavily influenced by what happens with the 2009 state budget. Calls by politicians to expand the budget ceiling and increase spending may run counter to the Governor's plans concerning any rate reduction. However, it is also reported that neither the Bank of Israel nor the Finance Ministry object to a small increase in spending, such as raising the 1.7% increase already agreed upon for next year to about 2%. The deficit is expected to increase in any case, as tax revenues will decline due to the economic slowdown. The prevailing estimate is that tax revenues will be NIS 3-6 billion lower than initially forecast, though some senior officials are even more pessimistic and talk about a NIS 9 billion drop. This, of course, would increase the deficit, meaning that the government's share of national economy activity during 2009 would also increase. (JP29.09)
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2: ISRAEL MARKET & BUSINESS NEWS
2.1 Herley Industries Acquires Eyal Microwave Industries
Lancaster, Pennsylvania's Herley Industries announced its acquisition of Eyal Microwave Industries (EMI), a privately held Israeli company in an all cash transaction. Israel's Eyal Microwave Industries is a leading supplier of a broad range of innovative, high-reliability, RF, microwave and millimeter wave components and customized subsystems, for the global defense industry. Based in Kibbutz Eyal, the company has approximately 175 employees. EMI includes Eyal Microwave and its subsidiary Eyal Mag. Herley Industries will acquire EMI through its own subsidiary in Israel, General Microwave Israel Corp. (GMIC). Herley Industries is a leader in the design, development and manufacture of microwave technology solutions for the defense, aerospace and medical industries worldwide. (Herley17.09)
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2.2 Jazz Technologies Announces Stockholders Approval of Tower Semiconductor Merger
Newport Beach, California's Jazz Technologies, a leader in Analog-Intensive Mixed-Signal (AIMS) foundry solutions, announced that at a special stockholders' meeting, its stockholders voted in favor of the approval and adoption of the Agreement and Plan of Merger and Reorganization with Tower Semiconductor. Jazz reported that approximately 66.1% of Jazz's outstanding shares of common stock voted to approve the merger agreement, which exceeded the majority vote required for adoption of the agreement, and less than 1% of Jazz's outstanding shares of common stock voted against approval of the merger agreement. Under the terms of the agreement, Tower will acquire all of the outstanding shares of Jazz in a stock-for-stock transaction. Migdal HaEmek's Tower Semiconductor (http://www.towersemi.com) is an independent specialty foundry that delivers customized solutions in a variety of advanced CMOS technologies, including digital CMOS, mixed-signal and RF (radio frequency) CMOS, CMOS image sensors, power management devices, and embedded non-volatile memory solutions. Boasting two world-class manufacturing facilities with standard and specialized process technologies ranging from 1.0- to 0.13-micron, Tower provides exceptional design support and technical services to help customers sustain long-term, reliable product performance, while delivering on-time and on-budget results. (Jazz18.09)
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2.3 Majic Wheels Starts Trading on the OTC Bulletin Board
Majic Wheels Corp announced that its stock began trading on the OTC Bulletin Board. The company's ticker symbol is MJWL. Majic Wheels is currently completing its prototypes. The company will be developing and manufacturing remote-control operated toy cars that defy gravity as they climb vertically up walls. The company's cutting edge technology will allow the production and distribution of cars that will be able to drive across the ceiling without falling. The unique nature of the Majic Wheels invention will enable toy cars to overcome the challenges of all vertical surfaces. Majic Wheels cars will come with rechargeable batteries and are environmentally friendly. The company uses a patented technology and is patent pending in the United States. Majic Wheels plans to start selling its products in 2009. Ramat Gan's Majic Wheels Corp. (http://majicwheels.com) was founded in Israel in 2007 and is incorporated in Delaware US. Majic Wheels will be developing, manufacturing and marketing a remote-controlled toy car that can climb inclined and even vertical surfaces. (Majic Wheels 18.09)
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2.4 Google Announces First Israel Based "Google Developer Day"
On 22 September, Google Inc. today announced its first "Google Developer Day" in Israel, which is scheduled to take place on 2 November. Google Developer Days are global, one-day events comprising multiple tracks of breakout sessions and hands-on code labs on Google developer tools and APIs. Google Developer Days are a chance to learn about Google developer products from the engineers who built them. These one-day events will include seminars and code labs on web technologies including Google Maps, OpenSocial, Android, Gears, Google Web Toolkit and more. Senior Google executives and engineers are due to attend "Google Developer Day" in Israel, including engineers of Google Chrome and V8, the company's Java script engine. There will be an open forum, where Israeli developers will able to share know-how with Google experts and other developers. (Google22.09)
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2.5 Tower Semiconductor Completes Merger with Jazz Technologies
Tower Semiconductor announced the completion of its merger with Jazz Technologies. As a result of this transaction, both Jazz Technologies and its subsidiary, Jazz Semiconductor, Inc., became wholly owned subsidiaries of Tower Semiconductor. Tower's name will remain the same and Jazz Semiconductor will be known as Jazz Semiconductor, Inc., a Tower Group Company. The merger creates a financially stronger company with trailing twelve month (TTM) revenues of approximately $440m and pro forma TTM EBITDA of approximately $120m, including the effects of an expected additional $40m in annual cost saving synergies previously announced in conjunction with the merger. Following the anticipated closing of Tower's restructuring transaction with its lenders based on the Memorandum of Understanding reached last month, Tower's balance sheet will be significantly improved and reflect a $250m reduction in debt and corresponding $250m increase in shareholders' equity. This restructuring is also expected to result in improved financial performance and cash flow margins due to lower interest expense as a result of the reduced debt. Tower and Jazz together now provide one of the industry's broadest portfolios of specialty process technologies combining Tower's offerings in CMOS image sensor, non-volatile memory (NVM) and CMOS (RF and power) with Jazz's expertise in mixed signal, power management (CMOS and BCD) and RF (RF CMOS, SiGe and BiCMOS). Jazz's process technologies and customer base are complementary to Tower with minimal overlap, which we believe will enable Tower and Jazz to address a diverse customer base in high growth markets. Additionally, Tower and Jazz offer an IDM technology transfer program along with strong design support and customized design solutions providing modular technology that allows flexibility and rapid customization to fit customers' production needs.
Migdal HaEmek's Tower Semiconductor (http://www.towersemi.com) is a pure-play independent specialty wafer foundry established in 1993. The company manufactures integrated circuits with geometries ranging from 1.0 to 0.13-micron; it also provides complementary technical services and design support. In addition to digital CMOS process technology, Tower offers advanced mixed-signal & RF-CMOS, Power Management, CMOS image-sensor and non-volatile memory technologies. To provide world-class customer service, the company maintains two manufacturing facilities, each with standard and specialized process technology processes: Fab 1 ranging from 1.0 to 0.35-micron and Fab 2 featuring 0.18 and 0.13-micron. (Tower19.09)
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2.6 OpTier Raises $63 Million in Fourth Round of Funding
OpTier has raised an additional $47.5m in funding from new investors Index Ventures and Morgan Stanley and existing investors Pitango Venture Capital, Carmel Ventures, Lightspeed Venture Partners, Gemini Israel Funds and strategic partner Cisco. The company has also secured a $15m credit line with Plenus Venture Lending. The funding is a reflection of investors' confidence in OpTier's current and future growth prospects. In the past year, OpTier further accelerated and broadened its deployments in Fortune 500 organizations, generating significant sales growth. Along with continued product innovation, OpTier's exceptional momentum has strengthened the company's position as the leader in Business Transaction Management (BTM). OpTier's management team will use the funding to aggressively pursue plans to enhance and broaden the company's offerings in the BTM market via acquisition and organic development, fueling sales and marketing and expanding industry partnerships. The company is currently building its staff through employee recruitment in the U.S., Europe and Israel.
OpTier's CoreFirst tracks business transactions through a complex infrastructure, automatically discovering the interconnections of each transaction, and then mapping them to a business service. By uniquely identifying all transactions, OpTier provides a real-time picture of every transaction throughout IT infrastructures. It identifies and reacts to changes in the infrastructure in real-time, using this information to reduce outages, quickly isolate and repair problems, improve operational efficiency, better align IT with business priorities and lower overall costs.
Ramat Gan's OpTier (http://www.optier.com) harnesses the power of real business transactions with its unique Business Transaction Management (BTM) software solutions. The CoreFirst product assures that business transactions flow smoothly within IT applications and infrastructure without bottlenecks or outages, for improved end-user experience and reduced cost. (OpTier23.09)
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2.7 Altair Semiconductor Closes $22 Million Series 'C' Funding Round
Altair Semiconductor closed a $22m Series C funding round. The round, in the form of a combined equity and credit investment, was led by Pacific Technology Fund (PTF), and joined by ETV Capital and returning investors. The funding will be used to support Altair's global expansion, sales and customer support, as well as future development of Altair's chipsets for WiMAX, LTE and XGP. Altair's business has gained considerable momentum since its $18m Series B round of funding in May of 2007. Less than six months after releasing the ALT2150, the world's smallest and most power-efficient mobile WiMAX processor, Altair's solution is considered an industry benchmark for mobile, handheld devices, and is integrated in some of the world's leading device and module manufacturers' products. Recently, Altair had been awarded the leading supplier position of chipsets for wireless devices operating on Willcom Inc.'s next generation PHS (XGP) in Japan, a 4G technology similar to mobile WiMAX. On the LTE front, Altair has created strategic partnerships with key ecosystem members to accelerate the development and interoperability of its LTE solution.
Hod HaSharon's Altair (http://www.altair-semi.com) is the world's leading developer of ultra-low power, small footprint and high performance 4G semiconductors that take broadband bandwidth beyond notebooks and USB adaptors to un-tethered, battery-operated handheld devices. The company's products provide handheld device manufacturers, integrating 4G technologies into their products with a highly power-optimized, robust and cost-effective solution. Altair is privately held and has raised a total of $48m in three rounds of financing from investors, including Bessemer Venture Partners, BRM Capital, ETV Capital, Giza Venture Capital, Jerusalem Venture Partners and Pacific Technology Fund. (Altair Semiconductor 23.09)
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2.8 Norwest Venture Expands Into Israel
Norwest Venture Partners (NVP), a leading global technology venture capital firm, announced that they have expanded their global strategy and strengthens its focus on Israel. To that end, Mr. Dror Nahumi has joined NVP as a Partner in Israel. Nahumi brings to NVP more than 20 years of extensive operational, technology and entrepreneurial experience, having worked extensively in both the U.S. and in Israel in various senior positions at leading organizations such as ECI, I-Link and AT&T Bell Labs. NVP focuses on technology investments in the semiconductor and components, software, systems, services, internet, media and consumer sectors. NVP has more than 47 years of success funding new technologies with significant long-term growth opportunities. The firm has invested in more than 450 companies since inception, including several investments in Israeli companies during the past five years. Qumranet, one of NVP's Israeli portfolio companies, was recently sold to Red Hat. The firm has also made investments in such Israeli companies as ConteXtream, DoubleFusion, Veraz Networks, Unisfair and Timebridge, which has dedicated operations in Israel. The firm plans to invest even more heavily in Israeli technology companies in the years ahead, and will co-invest with local venture capital firms in Israel, as it has already done so with several of its existing portfolio companies. (NVP23.09)
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2.9 Jiangxi Province in $200 Million R&D collaboration with Israel
Globes reported that the government of China's Jiangxi Province has signed a $200m R&D collaboration agreement with Israel. This is the first agreement of its kind between a Chinese provincial government and Israel, raising hopes for similar agreements with other provinces. The Israeli and Jiangxi governments would each budget up to $10m a year over ten years for the joint R&D ventures. Jiangxi Province in eastern China is responsible for 75% of the world's production of photovoltaic cells and 60% of China's output of flat screens. These are two emerging industries for Israeli industry and the potential for collaboration is great. China has targeted Israel for R&D investment as part of the country's foreign investment strategy. The cooperation agreement is a critical tool for the establishment of Israeli R&D centers by Chinese corporations and the expansion of Israeli exports to China. (Globes 28.09)
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3: REGIONAL PRIVATE SECTOR NEWS
3.1 Jumeirah to Manage Luxury Resort in the US Virgin Islands
Jumeirah, the Dubai-based luxury international hospitality management group and a member of Dubai Holding, has been appointed to manage a luxury multi-use resort occupying the entire western tip of St. Thomas, one of the US Virgin Islands. The Jumeirah Botany Bay Resort, formerly known as The Preserve at Botany Bay, will be located 15 minutes away from the Cyril E. King International Airport in St. Thomas, with regular flights connecting the tropical island to the United States. Jumeirah will manage the five-star boutique hotel of 84 rooms, spread over nine graceful buildings in an intimate and secluded setting. Scheduled to open in 2011, the 400-acre resort will also include 30 fractional residences, 30 whole ownership villas and up to 20 grand estates. This management agreement with Timbers Resorts is a key addition to Jumeirah's rapidly growing portfolio of luxury properties, with Jumeirah hotels and resorts currently under development in Phuket, Shanghai, Argentina, Mallorca, London, Dubai, Abu Dhabi, Doha and Jordan, among others. (Jumeirah22.09)
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3.2 Bloomingdale's to Open in Dubai in 2010
Macy's, Inc. announced that the first Bloomingdale's stores outside of the United States will open in February 2010 in Dubai, United Arab Emirates (UAE), as part of a strategic relationship with Al Tayer Group LLC, a leading UAE-based company with diversified businesses. Two Bloomingdale's locations – a three-level apparel and accessories store of about 146,000 square feet and a one-level home store of about 54,000 square feet – will anchor The Dubai Mall, which will be one of the world's largest shopping centers when completed in late 2008. The store's merchandise assortment, upscale ambience and high level of customer service will be similar to Bloomingdale's in the United States, while being sensitive to local preferences and customs. The stores will be managed and operated by Al Tayer Insignia, a company of Al Tayer Group, under a licensing agreement. Bloomingdale's is America's only nationwide, full-line, upscale department store and a division of Macy's, Inc. It was founded in 1872 and currently operates 40 stores in New York, New Jersey, Massachusetts, Pennsylvania, Maryland, Virginia, Illinois, Minnesota, Georgia, Florida, Nevada and California. Al Tayer Group is a diversified regional business established in 1979 with its headquarters in Dubai, UAE. (Macy's22.09)
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3.3 Monorail Deal Signed for $5 Billion City of Arabia
The Ilyas and Mustafa Galadari Group announced it had signed an agreement with the Swiss-based Metrail monorail system to build a monorail system to serve the $5 billion City of Arabia retail and residential project in Dubai. The development, which will include a total of 8,200 residential units, will be home to nearly 33,000 residents and project chiefs are keen to minimize the use of cars. City of Arabia is a retail, residential, commercial and entertainment project lying at the gateway to Dubailand. A self-contained 20 million sq ft community designed to minimize the use of cars, the development will be served by its own monorail system which will transport residents and visitors to and from a designated Dubai Metro station. The monorail network consists of a six kilometer dual track with 11 stations and six two-car trains. The first section will be operational in 12-18 months, project chiefs said, while the City of Arabia scheme will have a phased opening beginning in late 2010. (AB23.09)
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3.4 Oman To Invest $5 Billion In Domestic Steel Industry In 2008
Oman is aiming to become one of the Gulf region's top iron and steel producer, with plans to invest $5b to boost productivity and construct new facilities. As a relative newcomer to the steel sector, Oman has witnessed significant growth in its steel industry in the last few years. Industry analysts are optimistic of Oman's potential to become a major steel producer in the region, with the government taking substantial investments in developing its steel production capacity primarily to supply the burgeoning local consumption, which is expected to hit 1.1m tons by 2010. Danube Building Materials FZCO, construction, interior decoration and shop fitting industry, has announced that it will be channeling $13.6m to develop a new steel facility in Mabella, Oman. The facility will function as the logistics hub for Danube's operations in Oman and will facilitate the storage of all stock including deformed bars and other structured steel like angles, channels and plates. (AB29.09)
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3.5 More Affordable Water for Algeria with ERI PX Technology
San Leandro, California's Energy Recovery (ERI), a global leader of ultra-high-efficiency energy recovery products and technology for desalination, announced that it had won another large-scale energy recovery contract for seawater reverse osmosis (SWRO) desalination in Algeria. The Mostaganem SWRO Desalination Plant, located approximately 38 miles east of Oran in the western seaside region of the country, will have a total capacity of 200,000 cubic meters per day (m3/day) (52.8 million US gallons per day), enough to supply drinking water to a population of over one million people. The plant is expected to begin operation sometime in the second half of 2009. The Mostaganem plant is being built on a 25-year build own operate and transfer basis by UTE Mostaganem, a consortium consisting of Inima (Grupo OHL) and Aqualia (Grupo FCC) of Spain. (ERI24.09)
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4: ISRAEL MACRO-DEVELOPMENTS
4.1 Agritech 2009 Will Focus on Agricultural Solutions to Solve the Global Food Crisis
Agritech Israel (http://www.agritech.co.il), one of the leading international exhibitions, announced that the theme of its 17th annual exhibition will be centered on products, solutions and technologies connected to food production. Exhibitors consist of leading international companies and organizations that provide a wide range of agricultural solutions for various climates and needs. Apart from proven solutions that are already deployed around the world, such as irrigation systems, fertilizers and seeds & green houses. Companies will also introduce their latest innovations and developments in a wide range of areas. The exhibition will showcase traditional agricultural solutions, such as production & treatment of fruits, vegetables and flowers & livestock. Agritech 2009 is also the place to be for green-tech solutions, such as organic agriculture, environmentally-responsible equipment and green production methods & eco-friendly treatments. For visitors looking for turn-key projects or knowledge transfer, Agritech has proven to be an ideal platform for interested companies, organizations and professionals alike. The 17th international agriculture exhibition Agritech 2009 will take place May 5 -7, 2009 at Tel Aviv Exhibition Grounds in Tel Aviv, Israel. Agricultural machinery and greenhouses will be located in the outdoor area, while all other products, solutions and technologies will be shown in various halls. Agritech Israel has been serving as a platform for the past three decades to bring together more than 7,000 foreign visitors from 115 countries to interact with leading agriculture technology companies around the world. (Agritech 22.09)
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4.2 Index Finds Israeli Corruption Higher
On 23 September, Transparency International released their 2008 Corruption Perception Index (CPI). Israel's ranking fell as it received a score of 6 out of 10. Israel's 2008 score is considerably lower than the 7.97 score it received in the 1997 index. The index isn't based on absolute facts, but rather on the perceptions of those who were surveyed. The 2008 CPI scored 180 countries on a scale from zero (highly corrupt) to ten (highly clean). The index focused on corruption in the public sector and defined corruption as the abuse of public office for private gain. The surveys used in compiling the CPI asked questions relating to the misuse of public power for private benefit, including bribery of public officials, kickbacks in public procurement and embezzlement of public funds. This year, the composite index in Israel was created by drawing on six different expert and business surveys, in the country and abroad, carried out by five different institutes. The 2008 score reflects an increase in the perceived corruption in Israel, which ranked in the 30th place (with a score of 6.1) in the 2007 CPI. Denmark, New Zealand and Sweden share the highest score at 9.3, followed immediately by Singapore at 9.2. Bringing up the rear is Somalia at 1.0, slightly trailing Iraq and Myanmar at 1.3 and Haiti at 1.4. The United States shared 18th place with Japan and Belgium, with a score of 7.3. (TI23.09)
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4.3 Survey Finds 47% of Israelis Unconcerned About Environment
Globes reported that a new survey by New Wave Research has shown that the attraction of a green image for marketing is significantly smaller than Israel's retail chains previously thought. The survey, which investigated the Israeli public's commitment to protecting and preserving the environment, found that 47% of the public are not at all concerned about issues relating to the environment and are not interested in behavior that would minimize damage to the environment. Some 39% of the public expressed care and concern for the environment but most of them do not do anything to improve the situation. Only 18% of the public takes effective measures to improve the environment as well as expressing their involvement and concern. This latter group is the first target for marketing green products. (Globes 23.09)
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5: ARAB STATE & PAKISTANI DEVELOPMENTS
5.1 Jordan & US Sign MOU on Bilateral Assistance
On 23 September, Jordan and the United States signed a non-binding Memorandum of Understanding to help meet shared objectives and enhance US bilateral assistance to Jordan. The document was signed by Jordan's Foreign Minister Al-Bashir and U.S. Secretary of State Rice on the sidelines of the UN General Assembly meetings. The MOU, a first of its kind between Jordan and the United States, reaffirms the strategic partnership and cooperation between the two countries and builds on the strong bilateral relations. The MOU will assist Jordan in addressing socio-economic and security challenges by pledging to increase the US assistance to Jordan over the period of 2010-2014 to $360m per year in Economic Support Fund (ESF) and $300m per year in Foreign Military Financing (FMF). These new assistance levels will be pending final approval by the US Congress and is contingent on availability of funds. (Petra23.09)
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5.2 Wind & Hydropower on Order for Iraq's Kurds
Iraq's Kurdistan Regional Government is looking to wind and hydropower to meet its electricity needs. The KRG Electricity Ministry wants wind farm feasibility studies in all three of its northern Iraq provinces and three hydropower plant feasibility studies. It announced the invitation to tender on its Web site, with a 20 October deadline for bidders. The KRG is fast developing its oil and gas resources with controversial contracts that Baghdad criticizes. The central and regional governments are at odds as to the rights to develop hydrocarbons resources. Most of the oil and gas produced will be exported, if an agreement can be reached. Meanwhile, Iraq as a whole, and the KRG specifically, suffer from insufficient electricity supplies due to a lack of infrastructure and fuel for power plants. The KRG projects could overcome the first hurdle and bypass the second. Companies will propose sites, collect and analyze wind data at the sites, design farms for the sites and conduct feasibility studies for all wind sites in Iraq's Dohuk, Erbil and Sulaimaniya provinces. Companies will conduct surveys of dam and reservoir sites, conduct hydrological, hydraulic, geological and geotechnical studies, and a study for the plant itself. (UPI23.09)
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5.3 Perceived Corruption Drops Across Persian Gulf
Corruption has fallen across the Gulf as governments strengthen oversight and accountability, Transparency International (TI) said in its 23 September report, citing Oman and Qatar as making "significant improvements over the last year". TI's 2008 Corruption Perceptions Index (CPI) found that all Persian Gulf states, except Kuwait, showed improvement in the level of corruption within their societies compared to last year. The CPI measures the perceived levels of public sector corruption in a given country and is a composite index drawing on different expert and business surveys.
Qatar was judged the least corrupt of all Gulf states, jumping four places to joint 28th out of 180 countries with a score of 6.5, up from 6.0 in 2007. Oman jumped a massive 12 places in the index to joint 41st with a score of 5.5, up from 4.7 the previous year. The UAE - where Dubai authorities has launched a highly-publicized crackdown on corruption - dropped one place this year to 35th, but its score actually improved from 5.7 in 2007 to 5.9 in 2008. Bahrain rose three places to a joint 43rd with a score of 5.4, up from 5.0 in 2007, while Saudi Arabia dropped one place to joint 80th, although its score improved to 3.5 from 3.4 last year. Kuwait was the only Gulf state not to register any improvement, with its score staying at 4.3. The lack of progress saw its ranking drop five places to joint 65th. (AB24.09)
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5.4 Persian Gulf Ministers Approve Monetary Union Plan
On 17 September, the Qatari Finance Minister Youssef Kamal announced that Persian Gulf Arab finance ministers approved an agreement for future monetary union. The ministers met in the Saudi port city of Jeddah to set out milestones for the long-awaited monetary union plans that have been threatened by soaring inflation. The countries will also defer the decision on the location of a future common central bank to a heads of state summit in November. The ministers also decided that five countries would have to ratify the monetary union agreement before a common monetary council could be established, rejecting a proposal for the body to be set up after ratification by only three states. The Gulf Cooperation Council (GCC) includes Kuwait, Bahrain, Qatar, Saudi Arabia, Oman and the UAE. (Various18.09)
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5.5 Kuwait Prepares $131 Billion Development Plan
Kuwait is preparing a five-year plan worth $131b that aims to develop the financial sector and lure more foreign investment. The Opec producer wants to diversify its economy away from oil by becoming a regional financial centre and attracting tourists as nearby Dubai and Bahrain have done, according to the state's 2009-2014 policy strategy plan. The plan would cost a total of $130.94b to fund projects and train administration staff, Moudhi Al-Humud, the minister of state for housing and development, announced after a cabinet meeting. The draft law for the plan will be sent to parliament before it reconvenes in October, she added. Under the plan, prepared by the country's top planning council, Kuwait aims to boost its non-oil economy, which currently accounts for less than 10% of state revenues, by launching several big projects and improving the Gulf Arab state's infrastructure. It also seeks to ease land ownership rules and give the private sector more access to land, and control spending as inflation rises. More than 90% of land in Kuwait is owned by the government. (Various19.09)
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5.6 Kuwait inflation Reaches 11.35%
The Kuwaiti government announced on 28 September that annual inflation rose to 11.35% in June from 11.08% in May, driven by housing and food costs. The Gulf state's all items consumer price index advanced to 130.5 points on June 30 compared with 117.2 points a year earlier. As in previous months, inflation was driven by housing costs, which gained 13.15% in the year to June, while food costs rose 14.20%, the data showed. The Kuwaiti government has unveiled a package of measures to combat inflation including raising subsidies on food and building materials. The cost of beverages and tobacco advanced 24.09% in the year to June, household goods prices gained 15.5% and transport and communications costs rose 4.8%, the data showed. (Various29.09)
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5.7 Bahrain Inflation Rises To 3.3% in August
Bahrain's Central Informatics Organization announced on 21 September that annual inflation in Bahrain rose slightly to 3.3% in August and consumer prices advanced more than 1% from the month earlier on higher food costs. The consumer price index of the smallest Gulf Arab economy rose to 107.5 points on Aug. 31 compared with 104.04 points a year earlier. Annual inflation in Bahrain amounted to 3.1% in the first six months of the year, CIO data showed in July. Consumer prices in August rose 1.13% from July, the data showed. Food, beverage and tobacco prices climbed 2.4% in the month. (CIO21.09)
5.8 Qatar's Economy Expands 61% in Second Quarter To $26 Billion
Qatar's economy expanded by 60.8% at current prices in Q2 to $26.41b, spurred by high energy prices, Qatar Statistics Authority data showed on 25 September. GDP for the world's top exporter of liquefied natural gas is soaring as it expands its oil and gas sector and ploughs money into infrastructure, construction and manufacturing. The mining and quarrying sector, which includes oil and gas, jumped 85.27% in the three-month period to 61.02 billion riyals. The average price of benchmark US oil was $123.80 in the second quarter, compared with $95.98 on December 31. Qatar's construction sector grew 19.84% in the second quarter, while the electricity and water sector expanded 23.63%. Manufacturing jumped 62.2%, the data showed. The Gulf state's economy expanded 25% last year to 258.6 billion riyals. It is set to grow 11.6% in real terms this year, the fastest pace in the oil-exporting Gulf Arab region. Pundits feel Qatar's economy will be worth $95.3b this year. (QSA25.09)
5.9 Saudi Inflation Not Set To Ease Until 2009
On 24 September, Saudi Arabia's Central Bank Governor Hamad Saud Al-Sayyari said inflation in the world's top oil exporter could begin declining in the first quarter of 2009, later than previously expected. Inflation in the Saudi kingdom eased from a peak of at least 30 years to 10.9% in August, as gains in key components - rent and food prices - steadied in the largest Arab economy. "The inflation correction could happen in the first quarter of 2009 instead of the second half of 2008," Al-Sayyari said. The Saudi cost of living index was 117.9 points on Aug. 31, according to Central Department of Statistics. That compared with 106.3 points a year earlier. Food and beverage prices gained an annual 15.8% in August down from 16% a month earlier. The rental index, which includes rents, fuel and water, rose an annual 18.5% in August down from 19.8% in July. Inflation is a key challenge across the Gulf Arab region, where most states peg their currencies to the dollar, a fact that contributed to inflation as weakness in the US currency drove up import costs. Saudi Arabia, which has insisted it will keep its riyal's dollar peg, has tried to offset the impact of inflation on its 25 million people by raising public sector wages and boosting subsidies this year. The kingdom has also taken measures to curb public spending and tightened bank lending curbs to prevent lower borrowing costs from stoking inflation. Dollar pegs oblige the Gulf Arab states, bar Kuwait, to track US interest rate cuts, including seven in the last year. (Reuters24.09)
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6: TURKISH, CYPRIOT, GREEK & BULGARIAN DEVELOPMENTS
6.1 Turkey Makes Headway In Fight Against Corruption
Significant improvements have been seen in the fight with corruption in Turkey over the last year, according to the 2008 Transparency International report. In this year's index, Turkey ranks 58 and with a transparency score of 4.6, while in 2007 it ranked 64 with a transparency score of 4.1. (TI23.09)
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6.2 Turkey's Exports Increase By 36.42 % In September
Turkey's exports increased by 36.42 % in September when compared to the same month last year and reached $12.162b, according to the Turkish Exporters Assembly (TIM). According to the TIM, Turkey's exports between January and September increased by 35.43 % when compared to the same period in 2007 and reached $102.472b. Between September 2007 and September 2008, Turkey's exports were worth $132.770b. (SOL01.10)
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6.3 Cyprus Health Sector Worth €643 Million
Cyprus' Statistical Service has announced the publication of the annual report “Economic Statistics on health” for the year 2006. The report provides data on the number of establishments, employment, labor costs and other expenses, gross output. value added and data for the expenditure on fixed assets. During 2006, value added in real terms for the health sector increased by 3.3% compared with the 2.4% increase that was realized in 2005. At current market prices, value added in 2006 increased by 6.7% to C£272.4m (€465.4m), compared with C£255.2m (€436.0m) in 2005. Its contribution to GDP was 3.8% in 2006, the same as in 2005. Gross output increased by 8.9% to C£409.6m (€699.8m) from C£376.1m (€642.6m) in 2005. In private health, the most important contribution to the total value added was generated through the medical practice activities at 26.9%; hospital activities accounted for 23.1% while other human health activities accounted for 15.8%. In the public health sector, the most important contribution to the total value added was generated through hospital activities at 84.8%. Employment in health sector increased by 4.8% in 2006 compared with the previous year and reached 14,326 persons, accounting for 3.7% of the total economically active population and 4.0% of the total gainfully employed population. Gross fixed capital formation in 2006 decreased by 8.3% to C£23.2m (€39.6m) from C£25.3m (€43.2m) in 2005. Investment in new buildings accounted for C£11.4m (€19.5m); machinery and equipment accounted for C£9.1m (€15.5m); furniture and fixtures for C£2.3m (€3.9m) and transport equipment C£0.4m (€0.7m). (FM25.09)
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6.4 Azerbaijan Suffers $1 Billion Loss From BTC
Azerbaijan suffered a $1 billion loss in revenue from disruptions in crude exports through the Baku-Tbilisi-Ceyhan oil pipeline, which runs through Turkey, state officials said on 18 September. In August, a fire at a pumping station in eastern Turkey and military conflict between Russia and Georgia over the breakaway republic of South Ossetia disrupted the flow of oil through BTC, which carries roughly 1% of the world's oil. The director of the State Oil Fund of Azerbaijan, SOFAZ, said the loss could be made up. He stressed the impact on the state budget would be minimal as fiscal estimates for 2008 were based on an oil price of $70 per barrel. (UPI18.09)
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6.5 Greek Retail Sales Volume Down 2% in July
Greek retail sales volume fell by 2% in July, compared with the same month last year, the National Statistics Service said on 30 September. The statistics service said the retail sales turnover index (in current prices) rose 1.6% in July from the same month in 2007. NSS attributed the 2% decline in the retail sales volume index to a 3.3% rise in department stores, a 5.2% rise in pharmaceutical-cosmetics, a 2.3% decline in supermarkets, a 7.2% drop in food stores, beverage and tobacco, a 1.4% decline in clothing-footwear and a 0.8% fall in furniture-electrical appliances. (HR01.10)
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6.6 Transparency International Finds Corruption in Bulgaria is on the Rise
Corruption in Bulgaria has increased according to the 2008 Corruption Perceptions Index of Transparency International. Bulgaria's score has dropped from 4,1 in 2007 to 3,6 in 2008, which assigns it 72nd place out of a total of 180 countries. The Transparency International report points out that Bulgaria's EU accession had not helped the country deal with its corruption at all, and in fact it was now on the rise. Bulgaria is found to have serious issues with combating political corruption, which is linked to organized crime. The corruption in the country affects seriously the public procurement procedures, the concession contracts and the legal proceedings, and is reported to be hindering Bulgaria's progress, and to be the main reason for EU sanctions. Bulgaria is also ranked as the most corrupt country in the EU, followed by Romania. In the overall ranking, Romania is again one place ahead, ranking 71st. Columbia, Ghana, Georgia, Cuba, Kuwait, Tunisia, and Croatia occupy the spots before Bulgaria, whereas the People's Republic of China is ranked 73rd and the Republic of Macedonia is 74th. (TI23.09)
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7: GENERAL NEWS AND INTEREST
*ISRAEL:
7.1 Israel's Population at Eve of Jewish New Year is 7.3 million
The Central Bureau of Statistics announced on 24 September that Israel's population at Rosh HaShanah (the Jewish New Year's) 5769 stands at 7,337,000, of whom 5.54 million are Jews, 1.48 million are Arabs (20.1%) and 318,000 (4.3%) are non-Arab others. Last year at this time, Israel's population was 7,243,600. Israel has 978 men per 1,000 women. Up to the age of 36, men outnumber women, after which the ratio reverses. At 75, there are 672 men per 1,000 women. The proportion of single Jews is continuing to grow, especially among the young. In 2006, 76% of Jewish men aged 20-29 were single, up from 73% in 2000, and 60% of women in this age bracket were single, up from 54% in 2000. The main reason for the increase is the delay in marriage.
More than 3.8 million of Israel's population was born in the country. The largest source of origin of Israelis is Europe and America, accounting for 2.2 million people, or 38.5% of the country's Jews and others category. Some 15% of Jews and others, 781,000 people, originated in Africa, and 11.9%, or 611,000 people, originated in Asia. Most Jews from Asia immigrated to Israel during the 1950s and 1960s, at which point immigration almost completely ended. Half of Israel's Jewish population lives in the center of the country - 20.7% in the Tel Aviv district and 27.8% in the central district. Less than 10% of the Jewish population lives in the north. In contrast, the bulk of the Arab population lives in outlying areas - 45% in the northern district and 11% in the southern district. More than half of the population in the northern district is Arab (53%), whereas 90% of the population in the central district and 93% of the population in the Tel Aviv district is Jewish. The average number of children per woman of childbearing age was 2.9 in 2007. Life expectancy at birth in 2007 was 78.8 for men and 82.5 for women. (CBS24.09)
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7.2 Fast of Gedaliya Marked on 2 October
The Fast of Gedaliya (or Tzom Gedaliya, falling on the 3rd of Tishrei), follows Rosh HaShana. This year it is observed on 2 October. It marks the assassination of Gedaliya b. Achikam and the exile of the small Jewish community that remained in Israel after the Destruction. When Nebuchadnezzar King of Babylonia, destroyed the Temple in Jerusalem in 586 BCE and exiled the Jewish people to Babylonia, he allowed an impoverished remnant to remain in the land and appointed Gedaliah Ben Achikam as their Governor. Many Jews who had fled to Moab, Ammon, Edom, and other neighboring lands returned to the land of Judea, tended the vineyards given to them by the king of Babylonia and enjoyed a new respite after their earlier oppression. However, political machinations led Yishmael Ben Netaniah, to assassinate Gedaliah. Yishmael murdered Gedaliah, together with most of the Jews who had joined him and numbers of Babylonians whom the Babylonian King had left with Gedaliah The remaining Jews feared the vengeance of the Babylonian King and fled to Egypt. The surviving remnant of Jews was thus dispersed and the land remained desolate, until the Jewish polity was re-established in some 70 years' time. When Rosh Hashanah falls on Thursday and Friday, the fast is postponed till Sunday, since no public fast is observed on the Sabbath, except Yom Kippur. The fast is observed from daybreak until the stars appear in the evening.
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7.3 Yom Kippur – Holiest Day in the Jewish Calendar – Falls on 8/9 October
On the eve of 8 October and until after sunset on 9 October, Israel and world Jewry will observe Yom Kippur, or the Day of Atonement. The holiest day on the Jewish calendar, falling on the tenth of Tishri, it is a day marked by fasting, prayer and penitence for one's sins against their fellow man and G-d. Yom Kippur atones only for sins between man and G-d, not for sins against another person. To atone for sins against another person, you must first seek reconciliation with that person, righting the wrongs you committed against them if possible. That must all be done before Yom Kippur.
Yom Kippur is a complete Sabbath; no work can be performed on that day. It is a complete, 25-hour fast beginning before sunset on the evening before Yom Kippur and ending after nightfall on the day of Yom Kippur. The Talmud also specifies additional restrictions that are less well-known: washing and bathing, anointing one's body (with cosmetics, deodorants, etc.), wearing leather shoes and engaging in sexual relations are all prohibited on Yom Kippur. As always, any of these restrictions can be lifted where a threat to life or health is involved. In fact, children under the age of nine and women in childbirth (from the time labor begins until three days after birth) are not permitted to fast, even if they want to. It is customary to wear white on the holiday, which symbolizes purity and calls to mind the promise that our sins shall be made as white as snow. The day long fast is widely observed even among Israel's secular public and most of the country's Jewish population attend all or part of the day's synagogue services. The fast is concluded with a shofar blast and rejoicing.
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7.4 Sukkot Observed
The Jewish festival of Sukkot begins at sunset on Wednesday, 13 October until nightfall on 20 October 2008. The holiday begins on the Hebrew date of 15 Tishrei, the fifth day after Yom Kippur. The word "Sukkot" means "booths" and refers to the temporary dwellings that Jews are commanded to live in during this holiday. The commandment to "dwell" in a sukkah can be fulfilled by simply eating all of one's meals there or by actually living in the sukkah as much as possible, including sleeping in it. The holiday commemorates the forty-year period during which the children of Israel were wandering in the desert, living in temporary shelters. There are intermediate days during the week, which begins and ends with a holiday, referred to as Chol Ha-Mo'ed.
Another observance related to Sukkot involves what are known as the Four Species (arba minim in Hebrew) or the lulav and etrog. Jews are commanded to take these four plants and use them to "rejoice before the L-rd." The four species in question are an etrog (a citrus fruit native to Israel), a palm branch (in Hebrew, lulav), two willow branches (arava) and three myrtle branches (hadas). The six branches are bound together and referred to collectively as the lulav. The etrog is held separately. With these four species in hand, one recites a blessing and waves the species in all six directions (east, south, west, north, up and down, symbolizing the fact that G-d is everywhere).
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8: ISRAEL LIFE SCIENCE NEWS
8.1 CorAssist Proves Efficacy in Animals and Shows 3 Months Safety in Humans
CorAssist announced its flagship product, the ImCardia, significantly improved DHF parameters in a first-of-its-kind preclinical study and has shown preliminary safety in two humans after three months follow up. After working closely for four years with researchers at the Technion – Israel Institute of Technology in Haifa, Israel, CorAssist successfully adapted an acute diastolic dysfunction canine model into the first chronic diastolic dysfunction mini-pig model. Mini-pigs implanted with the ImCardia device showed a significant improvement in diastolic performance, as compared to a mini-pig control group. In parallel to its ImCardia efforts, CorAssist has advanced a minimally invasive product, the CORolla, into animal studies. Herzliya Pituah's CorAssist is a medical device company developing novel therapeutic devices for Diastolic Heart Failure (DHF). DHF is a condition in which the heart becomes stiff and/or fails to relax, and fills inadequately. Today, there are no evidence based therapeutic options for the estimated two million DHF patients in the United States. The company's “spring-like” devices harness elastic energy produced by the left ventricle during systole (contraction) and release the energy during diastole (relaxation). The released energy assists the left ventricle to overcome its stiffness by “springing back” an appropriate amount to improve relaxation and blood filling. (CorAssist18.09)
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8.2 Ultrashape Introduces a Faster Treatment and Better Patient Experience
UltraShape will introduce its latest software and new transducer at the upcoming 2008 European Academy of Dermatology and Venereology (EADV) annual meeting in Paris. The upgraded software and new transducer offer new features that reduce treatment time, lower treatment cost and enhance the UltraShape experience for both physicians and patients. The new UltraShape solution makes it possible to reduce average treatment time to between 40 and 60 minutes, depending on the treatment area, a reduction of about 35% over prior versions. In addition, Clinical studies conducted in France, Canada and Israel demonstrated that three-successive UltraShape treatments at two-week intervals are safe and effective, and show significant treatment area reduction, which means that the three treatment series can be completed within one month without compromising results. Lastly, UltraShape now offers an improved transducer that emits 50% more ultrasonic pulses for the same price as the previous one, thus reducing treatment cost significantly.
The UltraShape Contour I system, which is authorized for marketing outside the U.S., incorporates patented non-thermal selective focused ultrasound technology. Contour I, is the first scientifically and clinically proven non-invasive fat reduction and body contouring device for both men and women. The device is designed to produce mechanical, non-thermal, acoustic effects which target and selectively disrupt fat cells, leaving surrounding critical structures such as skin, blood vessels, nerves, and connective tissue intact. The UltraShape procedure is available in 57 countries and over 100,000 patient treatments have been performed worldwide with high patient satisfaction.
Yokneam's UltraShape (http://www.ultrashape.com) is redefining aesthetic medicine by developing, manufacturing and marketing innovative non-invasive technologies for body contouring. The company is dedicated to providing clinically proven safe and effective solutions that enhance the lives of patients worldwide. The UltraShape proprietary non-invasive body contouring technology is based on focused ultrasound that targets and selectively disrupts fat cells without affecting surrounding structures. The UltraShape system is not approved by the FDA for marketing in the US. (UltraShape 17.09)
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8.3 Teva Introduces Nicardipine HCl Injection in US; First Alternative to Cardene I.V.
Teva Pharmaceutical Industries announced the introduction of Nicardipine Hydrochloride Injection, 2.5 mg/mL, which is AP-rated to EKR Therapeutics' hypertension treatment Cardene I.V. Teva's product is the first alternative to the brand product. Teva is manufacturing and distributing the product, under license, as part of a license and distribution agreement entered into between Teva and Exela PharmSci, Inc., a Reston, Virginia based pharmaceutical development company. Teva Pharmaceutical Industries (http://www.tevapharm.com), headquartered in Israel, is among the top 20 pharmaceutical companies in the world and is the world's leading generic pharmaceutical company. The Company develops, manufactures and markets generic and innovative human pharmaceuticals and active pharmaceutical ingredients, as well as animal health pharmaceutical products. (Teva22.09)
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8.4 Galmed Medical Research Initiates Phase I Study of Aramchol,
Galmed Medical Research has started its Phase-I study in healthy human volunteers of its novel drug, Aramchol, developed for Fatty Liver Disease. This double blind, placebo controlled Phase-I trial was initiated at the Tel-Aviv Sourasky Medical Center (Tel-Aviv, Israel), is designed to assess and characterize the safety and tolerability of Aramchol in healthy male subjects at single doses and subsequently in overweight, mildly hypercholesterolemic, otherwise healthy male subjects receiving multiple doses. It is also aimed at assessing the pharmacokinetics of Aramchol at the administered doses and to characterize the drug effect on lipid profile and functional pharmacodynamics following single and multiple dose administrations. Non-alcoholic fatty liver disease (NAFLD) is the most common chronic liver disease today in most western countries.
Tel Aviv's Galmed Medical Research, Ltd (http://www.galmedgroup.com) is a leading biopharmaceutical company which develops innovative, proprietary drugs for the treatment of cholesterol and liver diseases. The Company has developed a series of proprietary fatty acid bile-acid conjugates (FABACs) which selectively affect several pathways in lipid metabolism. These compounds have potential in variety of therapies, as demonstrated in several species in vivo and in human cells and tissues in vitro. (Galmed23.09)
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8.5 Teva's ProAir HFA, the Market Leading Albuterol Inhaler, Receives New Pediatric Indication
Teva Pharmaceutical Industries announced that the U.S. FDA approved ProAir HFA (albuterol sulfate) Inhalation Aerosol for use in patients as young as 4 years of age. Previously, ProAir HFA had been indicated for use in patients aged 12 and older. In clinical studies, ProAir HFA, the market leading albuterol sulfate inhaler, exhibited significant bronchodilator efficacy in pediatric asthmatics aged 4 to 11 years. ProAir HFA provides physicians with a treatment option to help relieve children's asthma symptoms as they occur wherever they occur, which is especially important as children return to school. With asthma affecting more than one child in every 20 in the United States, studies show that asthma emergency room and hospitalization rates spike in September.4 For environmental reasons, the FDA and U.S. Environmental Protection Agency (EPA) have mandated the transition from chlorofluorocarbon (CFC)-based albuterol inhalers to HFA albuterol inhalers by the end of this year.
Teva Specialty Pharmaceuticals-USA is the U.S.-based respiratory division of Teva Pharmaceutical Industries. Teva Pharmaceutical Industries (http://www.tevapharm.com), headquartered in Israel, is among the top 20 pharmaceutical companies in the world and is the leading generic pharmaceutical company. The company develops, manufactures and markets generic and innovative human pharmaceuticals and active pharmaceutical ingredients. (Teva23.09)
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8.6 HealOr Announces $15 Million Investment to Heal Chronic Wounds
HealOr announced a $15m investment from Moshe (Mori) Arkin, former Vice Chairman and General Manager of Perrigo Global. This latest financing of $15m is HealOr's third round of financing. It's last round of financing was closed last November with $8m invested by Pitango Ventures. Previously the Company raised $4m from private investors in addition to $1.5m from Israel's Ministry of Industry, Trade & Labor. HealOr's leading family of products is based on groundbreaking cell signaling technology, which is effective in treating three sorts of chronic wounds: diabetic, venous and pressure ulcers. The solution is based on a family of enzymes called Protein Kinase C (PKC) that instruct the skin to complete certain tasks at certain times during the wound healing process. Where one isoform of PKC may be involved in wound closure, another one may be responsible for keeping the wound uninfected or ensuring that the epidermal cells remain unscarred. By isolating particular isoforms and their respective inhibitors and activators, HealOr can moderate and or stimulate certain phases of the wound healing process that are stunted or not functioning properly. HealOr lead product, HO/03/03 is indicated for diabetic foot ulcers. Unlike existing therapies that target only a single stage of the wound healing process, HO/03/03 affects almost every stage of the healing process. It protects the wound area from external pathogens, halts the inflammation response and expedites dermal closure to ensure optimal wound healing and the return of skin aesthetics. It is also a simple, painless topical that is applied to a wound on a daily basis.
Ness Ziona's HealOr (http://www.healor.com) is a leading Israeli biopharmaceutical company that develops innovative topical therapeutics for dermatology and wound healing. The company's lead application candidate and product pipeline demonstrates a novel scientific approach to the treatment of skin pathologies. This approach is based on the proprietary discovery of how to modulate biochemical mechanisms of action which promote skin repair and cellular regeneration. (HealOr24.09)
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8.7 Teva & Kowa Partnership to Create Leading Generic Pharmaceutical Company in Japan
Teva Pharmaceutical Industries and Kowa Company have signed a definitive agreement to establish a leading generic pharmaceutical company in Japan. The company, Teva-Kowa Pharma Co., Ltd. will seek to leverage the marketing, research and development, manufacturing and distribution capabilities of each company to become a broad based supplier of high quality generic pharmaceutical products for the Japanese market and reach sales of $1 billion in 2015. Each company will have a 50% stake in Teva-Kowa Pharma, which will become operational in 2009. Teva Pharmaceutical Industries (http://www.tevapharm.com), headquartered in Israel, is among the top 20 pharmaceutical companies in the world and is the world's leading generic pharmaceutical company. The Company develops, manufactures and markets generic and innovative human pharmaceuticals and active pharmaceutical ingredients, as well as animal health pharmaceutical products. Kowa Company has grown into a multinational Japanese company with approximately 50 affiliated companies. (Teva25.09)
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8.8 Applisonix Moves into Production Phase for the Selectif Ultrasonic Hair Removal Device
Applisonix is moving from the R&D phase into production phase for their Selectif ultrasonic hair removal device. Applisonix expands its operations into manufacturing, marketing and sales activities for the Selectif devices worldwide in accordance with the company's business plan milestones. Applisonix signed an agreement with R.H. Technologies for turn-key manufacturing of the ultrasound based hair removal systems. R.H. Technologies will perform all manufacturing operations for Applisonix, including purchasing, packaging and shipping the final product to Applisonix. Delivery of the Selectif devices is scheduled, as planned, for Q1/09. In August 2008, Applisonix announced the acquisition of Curelight Medical. In the same month Applisonix received the 2008 European Technology Innovation Award for the aesthetics market from Frost & Sullivan. According to the award announcement, Applisonix' ultrasound technology platform offers a unique solution for long-term hair removal for all skin tones, hair colors, and body parts.
Rehovot's Applisonix (http://www.applisonix.com) develops ultrasound based solutions for aesthetic applications and is currently focused on the long-term hair removal market. The company went through an Initial Public Offering (IPO) in the Tel Aviv Stock Exchange in the beginning of 2007. Nazareth Illit's R.H. Technologies (http://www.rh.co.il) is Israel's largest electronics contract manufacturing group, offering customers in a diverse range of industries world-class design, engineering, turnkey manufacturing and subcontracting services for electronic production assemblies and systems. R.H. Technologies enjoys a reputation for meeting the highest and most stringent quality standards in the industrial, telecommunications, security, medical sectors. (Applisonix 25.09)
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9: ISRAEL PRODUCT & TECHNOLOGY NEWS
9.1 Zehu Technologies to Introduces Zehu Authenticator 3.0
Zehu Technologies (http://www.Zehu.com), the premier provider of Adaptive Speaker Verification technologies, will debut the latest version of its innovative Adaptive Speaker Verification technology, Zehu Authenticator 3.0, at TMC's INTERNET TELEPHONY Conference & EXPO (ITEXPO) West 2008 (BOOTH #247), September 16-18, 2008 at the Los Angeles Convention Center in Los Angeles, California. Zehu's authentication platform is based on patented biometric Adaptive Speaker Verification (ASV) technology, which identifies speakers according to unique vocal identifiers that are related to the shape of an individual's vocal tract. Zehu Authenticator 3.0 technology provides the most accurate voice description available, utilizing both multi-layer and de-noising mechanisms for classification, cleansing and channel mismatch removal. Zehu is the premier provider of Adaptive Speaker Verification technologies for integration into simple and enterprise class applications. Their biometric voice authentication technologies enable secured access through speaker verification to improve security beyond traditional authentication methods. The Zehu ASV technology is an integral part of any access control system and increases the threshold of security in identity assurance, fraud protection and security information management. Zehu's headquarters and R&D facilities are based in Tel Aviv, Israel. (Zehu17.09)
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9.2 Aladdin eToken Debuts New Generation of Strong Authentication Solutions
Aladdin Knowledge Systems announced the general availability of Aladdin eToken PKI Client 5.0. As the foundation of eToken's PKI-based strong authentication solutions, eToken PKI Client 5.0 is at the forefront of encryption technologies. Public Key Infrastructure (PKI) is the basis for authentication, digital signatures and non-repudiation, and Aladdin's newest version of the eToken PKI Client provides an enhanced framework for creating a secure method for exchanging information based on public key cryptography. Continuing the Aladdin tradition of advanced strong authentication solutions, eToken PKI Client 5.0 for Windows is the forerunner in the eToken 5.0 version alignment. This generation will provide exciting new features and an enhanced user experience, as well as previewing upcoming eToken products, such as eToken Token Management System (TMS) 5.0. eToken PKI 5.0 for Windows will be followed shortly by versions for Linux and Apple Macintosh later this year, as Aladdin consistently makes available robust platforms with enhanced support to suit the needs of its customers. New features ensuring secure access include an enhanced Password Complexity Module that allows the user to determine password complexity (i.e. password strength/policy), improved management capabilities and ease-of use updates.
Petah Tikva's Aladdin eToken is the world leader for USB-based authentication solutions. eToken provides strong user authentication and cost-effective password management solutions, enabling secure network access, improved data security through enhanced encryption and digital signing, as well as compliance with a wide range of regulatory requirements worldwide. Aladdin Knowledge Systems (http://www.Aladdin.com) is an information security leader with offices in 12 countries, a worldwide network of channel partners, and numerous awards for innovation. Aladdin SafeWord two-factor authentication technology protects companies' important information assets and applications. Aladdin HASP SRM boosts growth for software developers and publishers through strong anti-piracy protection, IP protection, and secure licensing and product activation. Aladdin eSafe delivers real-time intelligent Web gateway security that helps protect data and networks, improve productivity, and enable compliance. (AKS17.09)
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9.3 Toronto-Area Police Secure Data & Meet CPIC Regulations With Aladdin eToken
Aladdin Knowledge Systems announced that Durham Regional Police (DRP) in Ontario, Canada chose the Aladdin eToken two-factor authentication device to comply with Canadian Police Information Centre (CPIC) regulations. DRP's deployment follows numerous other Canadian police forces that also chose Aladdin eToken. Durham Regional Police (DRP) serves 600,000 citizens within the Durham Region in Ontario, east of Toronto. DRP chose Aladdin eToken for its combination of smartcard authentication and encrypted flash memory, allowing DRP to comply with CPIC regulations and providing the additional benefits of Single-Sign-On, the Aladdin Token Management System (TMS) and the ability to store multiple certificates on the token. The powerful grouping of technology allows officers to access multiple important systems using only one convenient, secure token. Aladdin Knowledge Systems (http://www.Aladdin.com) is an information security leader with offices in 12 countries, a worldwide network of channel partners, and numerous awards for innovation. Aladdin SafeWord two-factor authentication technology protects companies' important information assets and applications. Aladdin HASP SRM boosts growth for software developers and publishers through strong anti-piracy protection, IP protection, and secure licensing and product activation. Aladdin eSafe delivers real-time intelligent Web gateway security that helps protect data and networks, improve productivity, and enable compliance. (AKS16.09)
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9.4 SiSense Launches Pricing and General Availability of Its Prism Business Intelligence Software
SiSense announced general availability and pricing of its Prism software. SiSense democratizes business intelligence by letting users access raw business data just by clicking "connect". Its desktop-based product allows any user to unleash the power of business intelligence, regardless of technical knowledge. SiSense's Prism has strong analytics, reporting and graphing capabilities and is the only business intelligence software which doesn't require IT support to work. No scripting or programming is involved. Since the product's beta launch in March, the company has amassed 2,700 users, from companies on the Fortune 500 to small corporations, business intelligence analysts and consultants. Netanya's SiSense (http://www.sisense.com) provides common sense business intelligence software that assists in visualization, analysis, dashboarding and reporting. SiSense uses a unique in-memory database that allows for complex analytics without building a middle tier for the data, so no scripting, programming or IT efforts are required. SiSense connects to Excel, Google spreadsheets, MySQL, MS SQL server, MS Access, Oracle and csv files and allows analysis and reporting as deep as if there existed an OLAP cube. Building a Dashboard takes less than 5 minutes, there is no scripting or programming. (SiSense 22.09)
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9.5 ImageID Introduces DUAL Technology for Detection of Unlabeled Asset's Location
ImageID announced DUAL (Detection of Unlabeled Asset's Location), the only currently available technology capable of detecting and indicating the location of untagged assets on a pallet. DUAL is the latest enhancement to Visidot, ImageID's proven SCT solution, which captures large field of view images, detects and decodes multiple barcodes simultaneously, with 100% accuracy. DUAL enables Visidot to provide an onscreen image of the pallet, pinpointing the location of missing or flawed tags. Operators can then take corrective actions such as manual tag application or data completion. Hod HaSharon's ImageID (http://www.imageid.com) is a leading provider of image-based traceability solutions. Visidot, the company's line of proven traceability products, consistently enhances logistics and manufacturing process efficiency and reliability. It enables tracking and tracing of millions of assets a day, with 100% accuracy. Visidot provides complete supply chain control to customers in a broad range of industries, from fresh food manufacturers and RTI poolers to automotive companies and others. (ImageID22.09)
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9.6 Denmark's ELRO Deploys ECI Telecom's Carrier Ethernet Platform
ECI Telecom announced that Danish utilities company ELRO Amba has selected its SR9700 Series of Carrier Ethernet Switch Routers (CESR) to be deployed as part of its nationwide WiMAX network. ECI's SR9700 Series of Carrier Ethernet Switch Routers enables operators to transform their metro infrastructure to efficiently support the latest Ethernet and IP services, and was specifically designed to meet the requirements of metropolitan core networks where density, performance and quality-of-service are critical. These platforms enable service providers to deploy an end-to-end, efficient, and resilient carrier-class network. The SR9700 Series is part of the 9000 Family which is at the core of the company's 1Net business framework. ECI 1Net is a comprehensive business framework focusing on the optimal transition to next-generation networks, through the unique combination of multi-functional network equipment, fully integrated solutions and a suite of professional services to provide customers the highest level of support as they evolve their networks. Petah Tikva's ECI Telecom (http://www.ecitele.com) delivers innovative communications platforms to carriers and service providers worldwide. ECI provides efficient platforms and solutions that enable customers to rapidly deploy cost-effective, revenue-generating services. (ECI22.09)
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9.7 BackFlip Software Launches Process Communications On Demand
BackFlip Software announced the availability of BackFlip Process Communications On Demand, the first communication service to provide a truly secured multi-channel environment for user-to-system and system-to-user communications through voice, instant messaging, text messaging, mobile browsing and email technologies. BackFlip Process Communication On Demand can be acquired on a per user per month basis (http://www.backflipsoftware.com). Kfar Saba's BackFlip Software is a driving force of business process communications. BackFlip's Process Communications On Demand service empowers organizations with the ability to receive, access and communicate information at any time through any communication channel. Business applications can invoke the BackFlip service easily and securely whether they are hosted or lie behind the corporate firewall. Interactive alerts, business information and real-time notifications can be sent out from these systems to any user by a variety of communication channels including automatic voice calls, instant messages, text messages and mobile browsing. Thus, business processes are accelerated, users no longer have to wait for information and decisions can be made and implemented quickly and effectively. (BackFlip 22.09)
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9.8 RADA Signs $6.2 Million Agreement to Deliver Advanced Video Recording Systems
RADA Electronic Industries has signed a $6.2m agreement with a major fighter-aircraft manufacturer to adapt, produce and deliver its advanced airborne video and data recording system (Net-Centric Digital Recorder - NCDR) as part of an upgrade package to one of its leading aircraft. In addition, RADA will adapt and supply its HUD Cameras as part of this upgrade. The NCDR is one of RADA's current most-selling products worldwide and is in production for several years now. The adaptation phase will be performed during 2009. Deliveries will commence from end-2009 till 2012, in accordance with the aircraft modification schedule. Netanya's RADA Electronic Industries (http://www.rada.com) is involved in the military and commercial aerospace industries. The Company specializes in Avionics systems (Digital Video Recorders, Ground Debriefing Stations, Mission Computers, Flight Data Recorders, Inertial Navigation Systems), Trainers Upgrades, Avionics systems for the UAV market, and Optronics (cameras for airplanes and armored vehicles).
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9.9 Gogimon Unveils World's First Internet Search Channel
Gogimon announced the world's first Internet Search Channel. Gogimon's Search Channel transforms the art of Internet searching by proactively analyzing, processing and prioritizing results received from Google, Yahoo! and Microsoft Live, thus "personalizing" results according to user specific input. This provides a much more efficient, user-relevant search, eliminating the need to laboriously mine through vast amounts of results in order to find useful information they are seeking. Unlike all other internet search engines that are web applications and offer a one-size-fits-all approach to search, Gogimon is a client-based software search medium, downloaded onto a user's computer. It is the only search tool capable of learning over time what the user is actually looking for, and then providing dozens of customized, user-relevant results rather than the millions of cookie-cutter ones offered by all other available search tools. In addition, Gogimon also solves the growing personal privacy concerns of web search, adding on a new layer of privacy protection. To achieve this level of protection, all personal user data is stored in the user's computer, not in the company's servers like with the traditional search engines, eliminating users' "Big Brother" fears.
The real value of Gogimon lies in the accuracy of the search and the time savings it offers over search engines. This is a result of Gogimon's features that enhance the search experience by offering several new ways to search and process results previously unavailable in the search engine landscape. Herzliya's Gogimon (http://www.gogimon.com) is committed to bringing internet users a completely revolutionary search experience. Gogimon's multi-layered search channel gives users streamlined, customized information by processing the abundance of results from the top three search engines. (Gogimon22.09)
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9.10 RiT Launches SiteWiz V2.0 - Industry's Most Advanced Cable & Asset Management (CAM) Solution
RiT Technologies launched Version 2.0 of SiteWiz, its powerful Cable & Asset Management (CAM) software solution. Designed for enterprises with complex existing communications networks, SiteWiz is an easy and cost-effective way for the IT staff to get a handle on all physical layer assets. SiteWiz provides the accurate documentation and status monitoring that the IT staff needs to efficiently plan, manage, provision and maintain all aspects of the physical layer. Its unique, field-proven features help improve IP asset management and network utilization, automate and simplify daily operations and ensure data sharing across departments and permissions mechanism to ensure data security. SiteWiz V2.0 will be available commercially from September 22nd 2008. Tel Aviv's RiT (http://www.rittech.com) is a leading provider of intelligent solutions for infrastructure management, asset management and network utilization. RiT Enterprise solutions address datacenters, communication rooms and workspace environments, ensuring maximum utilization, reliability, decreased downtime, physical security, automated deployment, asset tracking, and troubleshooting. RiT Carrier solutions provide carriers with the full array of network mapping, testing and bandwidth qualification capabilities needed for access network installation and service provisioning. RiT's field-tested solutions are delivering value in thousands of installations for top-tier enterprises and operators throughout the world. (RiT22.09)
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9.11 ECI Telecom to Supply Broadband Access Solutions to PLDT in the Philippines
ECI Telecom signed an agreement for the supply of broadband access solutions to Philippines Long Distance Telephone Company (PLDT), the incumbent and largest operator in the Philippines. ECI's Hi-FOCuS-5 Multi-Service Access Node (MSAN) central office and outside plant solution was chosen to support PLDT's nationwide expansion of high-speed internet DSL services for both business and residential customers over the operator's existing copper infrastructure. Part of ECI's 1Net business framework, the Hi-FOCuS is a carrier grade, future-proof MSAN solution, providing PLDT with the optimal transition path to a next-generation network solutions as it looks to deliver new services such as IPTV and VoIP in the future. ECI's Hi-FOCuS MSAN is the only solution in the market that simultaneously supports xDSL, next-generation voice and fiber technologies in any network architecture, enabling seamless evolution as network operators transition from copper-based solutions to broadband intensive services supported by fiber access. The Hi-FOCuS supports the varied needs of operators in developed and emerging markets, as they struggle with the need to continuously balance network deployment and service provisioning to both developed and under-developed areas. Petah Tikva's ECI Telecom (http://www.ecitele.com) delivers innovative communications platforms to carriers and service providers worldwide. ECI provides efficient platforms and solutions that enable customers to rapidly deploy cost-effective, revenue-generating services. (ECI22.09)
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9.12 Elbit Vision Systems Wins a $500,000 Order With Rolls Royce
Elbit Vision Systems has won a $500,000 order from Rolls Royce, for ultrasonic inspection systems. The order is to be delivered during the first quarter of 2009. EVS has supplied many ultrasonic systems to many of the sub-contractors who manufacture and inspect parts for Rolls Royce. This is the first time the Company has sold a system directly to Rolls Royce. Rolls Royce will be using EVS' ultrasonic inspection systems as critical elements in ensuring the safety of its engines to be used in its aerospace division. Kadima's Elbit Vision Systems (EVS) (http://www.evs-sm.com) offers a broad portfolio of automatic State-of-the-Art Visual and Ultrasonic Inspection Systems for both in-line and off-line applications, and quality monitoring systems used to improve product quality, safety, and increase production efficiency. EVS' systems are used by over 600 customers, many of which are leading global companies. (EVS25.09)
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9.13 Dune & MorethanIP Release Complete SPAUI & RXAUI Solution for FPGA and ASIC
Dune Networks and Munich, Germany's MorethanIP announced the immediate availability of the industry's first SPAUI and RXAUI intellectual property (IP) cores for FPGAs and ASICs. MorethanIP's SPAUI and RXAUI are optimized for Altera's Stratix II GX, Stratix IV, and Xilinx Virtex 5 LXT / FXT devices to provide a compelling solution for storage, telecommunications, and data center applications. The identical cores can also be targeted seamlessly to ASIC and Structured ASIC, providing a low-risk path to cheaper devices. Dune Networks (http://www.dunenetworks.com) is a semiconductor supplier of networking devices, facilitating the build of Data Center, Enterprise and Carrier Ethernet Solutions. Dune provides a switching solution that truly scales in capacity, port rate and service scheme. This extends the life cycle of packet platforms from the legacy 3 years up to 10 years or more, revolutionizing the economics of packet networks. Founded in 2000, Dune offices are located in Sunnyvale, California and in Yakum, Israel. (Dune Networks 28.09)
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9.14 Dune Networks Introduces Highest Density 10Gbps Ethernet Carrier-Grade MAC Aggregator
Dune Networks announced the availability of a new member in its PETRA family, called the P130. The P130 introduces Carrier-Grade MAC functionality, providing 80Gbps MAC, Packet Pre-Processor, and ingress/egress Traffic Management, required to meet the new density requirements of leading system providers. By integrating a flexible MAC with a Packet Pre-Processor and a programmable Traffic Manager at full-duplex rates of 80G, the P130 provides system vendors with the complete functionality requires for a carrier-class MAC aggregator. The P130 device enables system vendors to create various over-subscribed configurations that enable configuration from 2-to-1 up to 8-to-1. These can include combinations of multiple ports of 1GE and 10GE with future versions supporting 40GE and 100GE. The P130 pre-processor can be further used to offload packet processing from the system Network/Packet Processors. Dune Networks (http://www.dunenetworks.com) is a semiconductor supplier of networking devices, facilitating the build of Data Center, Enterprise and Carrier Ethernet Solutions. Dune provides a switching solution that truly scales in capacity, port rate and service scheme. This extends the life cycle of packet platforms from the legacy 3 years up to 10 years or more, revolutionizing the economics of packet networks. Founded in 2000, Dune offices are located in Sunnyvale, California and in Yakum, Israel. (Dune Networks 28.09)
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9.15 First Ever IPTV Services in Sri Lanka with Optibase Advanced Streaming Platforms
Optibase announced that its advanced encoders were selected by UTStarcom, a global leader in IP-based, end-to-end networking solutions and services, as part of an end-to-end integrated IPTV solution to Sri Lanka Telecom. Sri Lanka Telecom, a tier-one wireline and incumbent operator, providing international and domestic voice, Internet and data services, will use UTStarcom's RollingStream advanced IPTV solution, which incorporates Optibase's H.264 streaming platforms, to offer the country's first ever triple play services. Optibase's H.264 Media Gateway (MGW) 5100 encoding platforms, renowned for their top video quality and quick deployment, offer a highly reliable streaming solution. Herzliya's Optibase (http://www.optibase.com) provides professional encoding, decoding, video server upload and streaming solutions for telecom operators, service providers, broadcasters and content creators. The company's platforms enable the creation, broadband streaming and playback of high quality digital video. Optibase's breadth of product offerings are used in applications, such as: video over DSL/Fiber networks, post production for the broadcast and cables industries, archiving; high-end surveillance, distance learning; and business television. (Optibase29.09)
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9.16 ECI Telecom's Hi-FOCuS Series Ranked #1 Broadband Access Platform
ECI Telecom announced that Current Analysis, a leading independent research firm, has ranked ECI's Hi-FOCuS Multi-Service Access Node (MSAN) as the top platform in the CO DSLAM category for the second consecutive year. The rating is based on five major buying criteria: scalability, standards, capacity, QoS support and pricing. The Hi-FOCuS MSAN, part of ECI's recently announced 1Net business framework, is one of the most comprehensive fully multi-service broadband access platforms on the market today, simultaneously supporting data, video and voice over fiber and copper infrastructure. In the past year, the platform's superior quality of service attributes, traffic prioritization properties and advanced security capabilities, have contributed to a significant expansion of the Hi-FOCuS MSAN's customer base, with new accounts in Asia Pacific, the Former Soviet Union and Europe. Petah Tikva's ECI Telecom (http://www.ecitele.com) delivers innovative communications platforms to carriers and service providers worldwide. ECI provides efficient platforms and solutions that enable customers to rapidly deploy cost-effective, revenue-generating services. (ECI30.09)
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9.17 AAI Corporation & Aeronautics Defense Systems Team to Provide Orbiter Unmanned Aircraft
AAI Corporation, an operating unit of Textron Systems, entered into a teaming agreement with Aeronautics Defense Systems of Israel to market the Orbiter Mini-UAV (unmanned air vehicle) system jointly to U.S. and select international customers. Under the terms of this teaming agreement, AAI will lead marketing activities for the Orbiter Mini-UAV (MUAV) system in the U.S., including foreign military sales to Israel, and in other countries to be mutually agreed in the future. AAI also will manufacture the Orbiter system at its Hunt Valley, Maryland., headquarters for select programs. The Orbiter MUAV is less than 40 inches in length and designed for the rigors of intelligence, surveillance and reconnaissance missions. With an operational endurance of up to three hours, the Orbiter MUAV can fly as high as 18,000 feet. Its light composite construction and battery-powered operation allow easy portability to ensure a team of two fielded warfighters can quickly deploy, launch and operate the aircraft. The Orbiter MUAV system is a leading competitor for the Israel Defense Forces Land Forces Command acquisition program that recently was launched, already having been selected and operationally deployed by a number of other countries including Poland and Ireland.
Aeronautics Defense Systems (http://www.aeronautics-sys.com), based in Yavne, Israel, specializes in the provision of comprehensive defense solutions and in the development, manufacture, and operation of unmanned platforms, including air, sea, and ground vehicles as well as advanced observational, security, control and defense systems, miniaturized digital, wideband data link systems, and some of the most accurate and advanced navigational solutions in the world. (Textron 29.09)
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9.18 Commtouch & AXIGEN to Launch Integrated Email Security Product
Romania's AXIGEN, a leading messaging solution provided by Gecad Technologies, and Commtouch (http://www.commtouch.com) signed a licensing agreement aimed at launching an integrated product combining AXIGEN Mail Server's carrier class messaging with Commtouch's advanced email defense features. The new bundled AXIGEN-Commtouch product will integrate the Commtouch Recurrent Pattern Detection (RPD) technology into the AXIGEN Mail Server. Recognized as achieving superior detection/accuracy performance, RPD is focused on the most fundamental characteristic of spam and email-borne malware and phishing, namely their mass distribution over the internet. The Commtouch SDK embedded in AXIGEN's messaging solutions will work through a real-time connection to Commtouch's Global Detection Centers which analyze large volumes of Internet traffic and identify new spam, virus and phishing outbreaks based on mass distribution patterns. As a result, emerging outbreaks are identified moments after they are introduced into the internet.
Netanya's Commtouch Software is the source of proven messaging and web security technology for scores of security companies and service providers, founded on a unique datacenter-based approach. Commtouch's Real-time Global Detection Centers automatically analyze billions of transactions in real-time to identify new spam, malware and zombie outbreaks as they are initiated. Commtouch's unmatched suite of security offerings -- anti-spam, virus detection, reputation and zombie intelligence services - work together in a comprehensive feedback loop. (Commtouch24.09)
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10: ISRAEL ECONOMIC STATISTICS
10.1 Israel's Economy Set To Grow 4.5%
Israel's Central Bureau of Statistics is optimistic that the economy will grow by 4.5% in 2008, although the pundits are warning the rate will be slower because of the global economic crisis. The CBS estimate of 4.5% is based on data for the first six to eight months of the year and is higher than the 4.2% rate forecast by the Bank of Israel and Finance Ministry. GDP growth in H1/08 slowed to 5.5% from 5.7% in 2007. In H2/08, the economy is expected to grow at a much slower rate of 2.5%. The CBS expects the business sector to grow at a rate of 5.1% in 2008, while exports are set to grow at rate of 5.8%. According to a business-services survey conducted for the first time by the statistics bureau over the course of last year, software, together with research and development services, were the main services exported by Israel. These services, mainly directed to the US, make up 51% of all exported business services by Israel. The Finance Ministry's economic growth forecast for 2009 is 3.5%. (CBS25.09)
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10.2 Israeli Inflation Driven by Food Prices
The Central Bureau of Statistics and the Agriculture Ministry's planning department released figure indicating that the price of food continues to act as the main impetus for rising inflation. According to data, while the consumer price index increased by 0.8% in August, the prices of produce and other perishables rose by 1.9%. This definition includes nearly all basic foodstuffs such as fruit, vegetables, milk & dairy products, eggs, poultry, fish, meat and honey. The price increases in August were led by vegetables, which went up by 12.5% overall. Particularly notable were the increases in the price of cabbage (54.8%), zucchini (33.9%, eggplant (20.3%) and cucumbers (18.2%). Since the fresh food category was introduced in January 2006, prices have risen by 24.6%, three times the overall consumer price index (8.1%). The difference between farmer's revenues and the price paid by consumers remained high in August. The highest difference was seen for tomatoes (114.1%), onions (106.1%) and carrots (89%). (Various23.09)
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10.3 The Composite State-of-the-Economy Index for August 2008 up by 0.1%
Israel's composite State-Of-The-Economy index rose by 0.1% in August 2008. This rise follows a few months when the index was steady, and indicates a slowdown in the economy's rate of growth compared with that in the first quarter of the year. The rise in the index was the outcome of a rise in the indices of goods exports and trade and services revenue on the one hand, and declines in the indices of manufacturing production, services exports and goods imports on the other. The indices for June and July have been amended upwards, partly due to an upward revision of the data on goods exports and services exports for those months. With regard to the components of the index: the index of manufacturing production fell in July by 0.8%, after rising by 4.3% in June. The trade and services revenue index went up by 1.6% in July, following its 2.4% rise in June. The services exports index plunged in August by 12.8%, further to its 0.3% drop in July. The goods exports index rose by 0.5% in August, after rising by 2.5% in July. The imports index fell in August by 5.2%, following its rise of 5.8% in July. (BoI22.09)
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11: In Depth
11.1 LEBANON: Clear Skies
Lebanon's national carrier, Middle East Airlines (MEA), is bucking the international trend and looking to record a sixth straight year of profits, while embarking on an expansion program aimed at restoring the airline to its glory days. On September 22, MEA Chairman Mohammad Hout told local media the airline had been operating at full capacity over the key summer months, a reflection of the country's recent respite from political conflict. "During the months of July and August 2008, all seats on the company's planes were reserved," Hout said. "That's why we always focus on stability in Lebanon, which serves everyone."
Founded in 1945 as one of the region's first independent airlines, MEA has experienced both highs and lows. Having developed a world-wide network by 1975, it then halted almost all operations during the civil war, leasing its aircraft and seconding staff to other international carriers as the conflict periodically closed Beirut airport. Between 1980 and 2000, the airline racked up losses of $400m.
Since that time, MEA has undergone a major restructuring, cutting loss-making routes, reducing staff and shutting a number of overseas offices. The slimming down process has seen the airline fly back into the black, with MEA posting profits of $36m in 2006 and $60m last year. These results are especially laudable given Hezbollah's war against Israel in the summer of 2006, which effectively killed off tourism during the peak season that year, and the political instability and outbreaks of violence and civil unrest that marked 2007, along with soaring international fuel prices. MEA's success has continued into 2008, with projected profits of $70m, despite still higher fuel prices and an economy that was suffering from political instability up until May, when an agreement was struck to elect a president and form a consensus government.
Nevertheless, it is not all good news for MEA, as Hout announced on September 22 that the airline had for the moment decided to shelve plans to list 25% of the company's shares on the Beirut Stock Exchange (BSE).
The company is currently owned by the Central Bank of Lebanon, which took control in 1996 as MEA's losses mounted. While there have been multiple proposals to privatize the carrier, in the past was felt best to put the airline on a sound footing before a sell off. Now, with the global economy in decline, Hout said the initial public offering, scheduled for early 2009, had been postponed due to poor market conditions.
Funds generated from the IPO would have come in handy, as MEA has just embarked on a modernization program that will see nine new Airbus A330-200 planes added by 2010. While necessary to upgrade the airline's aging fleet, the acquisitions will also increase MEA's debt burden. According to Hout, on top of previous loans of $180m, the expansion program will add a further $450m of debt, along with $65m borrowed from the Lebanese Canadian Bank in mid-August to fund the purchase of a tenth Airbus.
Though MEA's achievements are impressive, the airline industry is indeed experiencing troubled times, with at least 20 carriers grounded this year, according to the International Air Transport Association (IATA). Along with fuel tariffs, which now account for 40% of airline costs, up from 13% seven years ago, the IATA also warned at the beginning of September that the global economic downturn would result in a drop in airline profits and reduced passenger growth rates.
Closer to home, MEA has to contend with strong competition for passengers. Though a proposal earlier this year from the government of Prime Minister Fouad Siniora to launch a second commercial carrier was dropped amidst vocal opposition by MEA's staff, more than 40 other carriers currently fly into Beirut, due to the government having adopted an open skies policy. The airline also has to contend with the specter of renewed political unrest and international conflict. Threats from additional military attacks against Israel by Hezbollah, now a part of the national unity government, or recent reports of Syrian troops massing on the border could easily undermine tourist confidence in Lebanon as a destination.
With the IATA warning that Middle Eastern airlines face a one third drop in profits this year, and little better in 2009 with weaker passenger and capacity growth predicted, MEA may struggle to meet its profit goals. This in turn may make its debt servicing more difficult, though it has the advantage that most of its loans are with local banks, which have high levels of liquidity and a history of supporting the airline. That said, MEA has charted a path for recovery and so far not strayed off course. Having survived invasions, civil war, political instability and losses that would have shot down lesser airlines, MEA is still reaching for the skies. (OBG26.09)
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11.2 KUWAIT: Battling Piracy
Kuwait is stepping up its campaign against breaches of intellectual property rights, which pose a major threat to the country's plans to expand the base of its economy and become a regional financial hub. The Oxford Business Group noted that in 2007, Kuwait's Intellectual Property Rights (IPR) Office, an arm of Kuwait Customs, intercepted 580 shipments of counterfeit products. This according to the unit's head, Osama Al Shami. Now the office is on its way to eclipsing its 2007 performance, as 320 seizures were made already during the first six months of this year.
The IPR Office is not the only one fighting copyright infringement. On September 17, local media reported that officials from the Ministry of Information raided a store in downtown Kuwait City and seized 30,000 copies of pirated compact discs. The crackdown comes as Kuwait is preparing to unveil a dramatic five-year plan to boost foreign investment and develop the financial sector. Under the plan, $130bn is to be spent to fund a series of projects and provide administrative training, Minister of State for Housing and Development Moudhi Al Humud told local media on September 19. Draft legislation for the plan will be presented to parliament when it reconvenes in October, said Al Humud.
As Kuwait is looking to invest heavily to diversify its economy, increasing the emphasis on finance and technology-related industries, it must address the pressing problem of protecting intellectual property rights and piracy. Prominent Kuwaiti attorney Khaleel Ebrahim Al Qattan warned that more needs to be done to curb intellectual piracy. "The executive and legislative authorities should be aware of this phenomenon and recognize its dangerous repercussions. Both authorities should fully understand the issue so they can enact suitable legislation that will put things back on the right track, especially since the country is now working on realizing its dream of becoming a commercial and financial centre in the region," he told local media on September 22.
The scale of intellectual property rights abuse in Kuwait is immense. According to figures from Kuwait's Interior Ministry, there were over 540,000 violations of copyright uncovered in the four years ending April 2008. Despite concrete efforts from authorities, international organizations are concerned that not enough is being done. In its 2008 report, the International Intellectual Property Alliance (IIPA), a US-based anti-piracy watchdog for the software industry, commended Kuwaiti authorities for clamping down on abuses of property rights, stating that, "copyright protection in Kuwait has improved for most but not all copyright industries due to increased cooperation with the Kuwaiti Ministry of Information, Kuwaiti Customs, and the Kuwaiti Ministry of the Interior".
Yet, while progress is being made, the report nevertheless estimated that 62% of all business software and 75% of all music and records sales in Kuwait are illegal, with the combined cost of these media amounting to $47m. Consequently, the IIPA recommended that Kuwait be kept on the US government's watch list of countries that have a major intellectual property rights protection problem. The report also advised that Kuwait update its copyright legislation, which was instituted in 2000, and recommended that the country enact mandatory minimum fines for those found guilty of infringing intellectual property rights.
Earlier this year, a study by information technology firm IDC and the anti-piracy group Business Software Alliance (BSA) said Kuwait could add $350m to its economy by reducing software piracy by just 10%, with the increased revenue stemming from taxes and higher revenues from the information technology sector. Like the IIPA report, the IDC study said Kuwait needed to strengthen its copyright protection laws.
Currently, the BSA rates Kuwait as having the highest rate of software piracy in the Gulf region. Similarly, the US-based Heritage Foundation said while Kuwait was ranked 39th in the world and second in the Gulf region on its 2008 index of economic freedom, the weak enforcement of intellectual property rights was adding to the cost of trade with the country. Kuwait may have taken these criticisms to heart, as the IPR Office's Al Shami says authorities are in the process of drafting new intellectual property rights laws. If new legislation is enacted and local authorities maintain their campaign against counterfeit products, this will help boost confidence in Kuwait's business environment, increase state revenue and get the country off international watch lists. (OBG26.09)
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11.3 BAHRAIN: Taking Care of Business
Bahrain, along with Saudi Arabia, are the only two Gulf Co-operation Council (GCC) member states to feature in the top 25 rankings in the World Bank Group's International Finance Corporation (IFC) study on the ease of doing business, a measure which encompasses how difficult it is to open and close a business, hire staff and cope with the corporate tax burden.
The survey, entitled Doing Business 2009, rates Bahrain 18th out of 181 economies. However, Bahrain's strong performance did not stop it from slipping one place, from 17th last year. The new ranking clearly reflects heightened competition from other states. For example, Saudi Arabia jumped from 16th to 20th position for the first time, on the back of a series of reforms aimed at facilitating business activities. These included reducing the amount of time required to register and open a new business and bolstering protection for minority shareholders.
While Bahrain's neighbors, such as Saudi Arabia, are in the process of implementing business-friendly laws, Bahrain started the process much earlier, so any drop in ranking needs to be qualified in light of this.
A particular area of strength in Bahrain is the issuing of construction permits. Coming in at 14th overall, with 13 steps required to be able to build a warehouse, a process that averages 56 days, Bahrain ranks well below the regional average, which stands at 19.3 steps and 186.6 days respectively. The kingdom's performance in this category is also well below that of the Organization for Economic Co-operation and Development (OECD) member countries, which require an average of 15.4 procedures to be carried out to set in train the construction of a storage facility, taking an average of 161 days in the process. Bahrain also ranked well in terms of registering a property, being listed 18th globally, and 26th in the category for ease of employing staff.
At the other end of the scale, Bahrain was ranked number 53 for protecting investors, 84 for ease of obtaining credit, and 113 for enforcing contracts, though this was a slight improvement on the 115 of last year. In all three categories - important for establishing credibility as a business and investment centre - Bahrain was below both the regional and OECD averages.
Bahrain's position as the Gulf's premier financial centre was also put under the spotlight in another study conducted by the World Economic Forum (WEF), which focused on the financial development of 52 countries. The report, issued in mid-September, ranked Bahrain 28th overall, behind the United Arab Emirates (UAE), Kuwait and Saudi Arabia across the Gulf region. The study covered seven key areas - institutional environment, business environment, financial stability, banks, non-banks, financial markets and the size, depth and access of financial markets - with Bahrain recording mixed results.
While the report said Bahrain had improved its standing in financial developments discipline, placing it 20th on the international ladder and first among Arab states, it was ranked just 43rd overall and fifth in the Arab world in terms of development of the financial sector for banks. The grading of the country's financial markets - including stock markets, exchange and bonds - fared better, with Bahrain coming 32nd internationally and third in the Arab world.
The WEF report did list Bahrain as being among the countries that had shown a better performance in regard to factors, policies and institutions that support financial systems, low cost of doing business and financial stability.
While remaining a business and financial powerhouse in the Gulf region, Bahrain is at risk of coming back to the pack if it does not work harder to achieve a better score card and does not continue to enact further reforms of its business and financial regulatory mechanisms aimed at speeding up and simplifying business procedures and further opening up its economy. Having made a good start, Bahrain needs to go on with the job. (OBG19.09)
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11.4 UAE: IMF Report on UAE Anti-Money Laundering & Combating Terrorism Financing
This Detailed Assessment Report on Anti-Money Laundering and Combating the Financing of Terrorism for the United Arab Emirates was prepared by a staff team of the International Monetary Fund using the assessment methodology adopted by the Financial Action Task Force in February 2004 and endorsed by the Executive Board of the IMF in March 2004. It is based on the information available at the time it was completed on June 19, 2008. The views expressed in this document are those of the staff team and do not necessarily reflect the views of the government of the United Arab Emirates or the Executive Board of the IMF.
EXECUTIVE SUMMARY
Key Findings
1. A basic legal framework for combating money laundering and terrorist financing is in place in the UAE, but that framework needs further strengthening in a number of areas. The AML law needs to be amended to expand the range of predicate offences and to provide greater powers for the financial intelligence unit. The FIU should also increase its own staffing so that it may operate as an autonomous unit, rather than relying on the resources of the Central Bank's Supervision Department and other regulatory agencies.
2. The legal framework for the financial sector preventive measures in the domestic sector provides a basic grounding, but it mostly predates the revision of the FATF Recommendations in 2003, which have now imposed much more detailed requirements. While the central bank has taken various administrative measures to strengthen the regime within the domestic sector, these require a more solid basis in the legal and regulatory framework, especially with respect to the customer due diligence (CDD) and related obligations. The regime applied to financial institutions operating within the Dubai International Financial Centre tends overall to be relatively close to the FATF standards.
3. The suspicious transactions reporting system delivers a lower number of reports than might be expected within a financial market of the size and nature of that within the UAE, and greater clarity is required about the basis on which institutions are expected to report transactions suspected of being linked to either money laundering or terrorist financing.
4. The authorities have taken positive initiatives to address the issue of Hawala dealers and have introduced a voluntary system of registration and reporting. The central bank intends progressively to formalize its oversight regime for this sector, which is to be welcomed.
5. The basic AML legislation captures some of the DNFBP sectors, but no specific customer due diligence or related obligations have been extended to these entities, and there is no AML/CFT regulatory framework within the domestic sector. At the time of the onsite visit, Dubai International Financial Center Authority (DIFCA) had drafted regulations for DNFBPs. Measures taken within the various free zones vary substantially.
2 The Dubai International Financial Center (DIFC) is the only financial free zone created so far within the UAE, although there are approximately 30 commercial free zones in which some of the designated non-financial businesses and professions may operate. Because the Federal AML Law has universal application within the UAE, this assessment contains a single set of compliance ratings, combining both the domestic sector, the DIFC and, where relevant, the commercial free zones. However, where appropriate, separate recommendations have been addressed to the authorities responsible for the individual sectors.
3 Subsequent to the mission, DIFCA issued its AML/CFT Regulations applicable to DNFBPs which became effective on July 18, 2007. They are not taken into account for the purposes of this report because their implementation falls outside the timeframe of the assessment.
Legal Systems & Related Institutional Measures
6. The UAE has criminalized money laundering in Federal Law 4/2002 and the financing of terrorism in Decree by Federal Law 1/2004. Money laundering is criminalized but not fully in accordance with the FATF Recommendations. The predicate offenses in the money laundering law should be extended to cover all serious offenses and, at a minimum, the 14 out of the 20 designated categories of offenses in the FATF 40+9 Recommendations not currently covered. The terrorist financing offense is in line with the international requirements of the International Convention on the Suppression of the Financing of Terrorism (ICSFT) but does not include the financing of an individual terrorist unless there is a contemplation of a terrorist act, which is a requirement under the FATF standard.
7. The Anti-Money Laundering and Suspicious Cases Unit (AMLSCU) is also established under the anti-money laundering law to carry out the financial intelligence unit functions. While the AMLSCU has undertaken a great deal of outreach, particularly in the banking sector, it needs to continue that outreach into other sectors, particularly the securities and commodities sector. It should also allocate more resources to fully analyze the STRs it receives. Furthermore, legislative action is needed in order to clarify the FIU powers and responsibilities.
8. Recently enacted laws relating to confiscation of proceeds of crime appear comprehensive and workable, but legislative amendment and awareness-raising is required in other areas. Overall resourcing and staffing in law enforcement does not appear to present a significant concern, but the extent of AML/CFT awareness across all legal and law enforcement sectors needs to be addressed. The enhanced development of specific financial intelligence tools and AML/CFT expertise in law enforcement, customs and the judiciary is also required.
Preventive Measures—Financial Institutions
9. The financial sector within the UAE is divided between institutions operating within the domestic market and those licensed to conduct business in the Dubai International Financial Center, the only financial free zone so far created in the UAE. While the federal laws on AML/CFT apply equally to the domestic sector and within the DIFC, the responsibility for issuing implementing regulations, and overseeing compliance, falls to the respective regulatory authorities. In the case of the domestic sector this involves the central bank (for banks, money changers and finance companies), the Emirates Securities and Commodities Authority (securities brokers) and the ministry of economy (insurance companies); whereas there is a single regulator, the Dubai Financial Services Authority (DFSA), for all financial services providers in the DIFC.
10. The primary AML legislation imposes very little by way of CDD obligations on financial institutions. Specific requirements are contained only in the instruments issued by the regulatory authorities, and these vary markedly in depth and quality, resulting (within the domestic sector) in a significant number of areas in which the requirements do not comply with the FATF standards. These include the identification of beneficial ownership, the conduct of ongoing due diligence, and the application of enhanced measures for high-risk customers. In addition, no requirements have been implemented with respect to politically-exposed persons and correspondent banking. By contrast, the DFSA has included extensive provisions within its rulebook that relate closely to the FATF Recommendations, although the mission considers that the rules do not match the FATF definition of "law and regulation," and that, therefore, they do not meet the statutory status required under the FATF standard. Given the current divergence of the detailed obligations imposed on different parts of the financial sector in the UAE, there would be considerable benefit in the authorities taking a more coordinated approach to the development of future regulations.
11. Record-keeping requirements are broadly addressed through a range of laws and regulations, although there are some gaps in the customer identification documents required to be retained by the domestic securities and insurance sectors. The current requirements under the central bank regulations relating to wire transfers are very general and fall well short of the FATF requirements in terms of the procedures for verification of identity and the transmission of originator information. The DFSA has issued rules that generally match the FATF standards.
12. The suspicious transactions reporting regime in relation to money laundering has been in place in the domestic sector for several years, but lacks clarity as to the exact basis on which reports should be filed. The central bank regulations refer variously to unusual and suspicious transactions, and there is no indication of whether institutions are expected to apply a subjective or objective test to suspicion. In addition, there is an apparent variation in the definition of the money laundering offense between the primary law and the regulations, such that it is unclear what the scope of the reporting should be in relation to the predicate offenses. The regulations issued for the domestic securities and insurance sectors refer only to the reporting of unusual transactions, and the general procedures in these sectors are far less developed than for the banking sector. The DFSA rules have much more expansive provisions than for the domestic sectors, requiring institutions to report transactions where there is knowledge, suspicion, or reasonable grounds to suspect that a person is engaged in money laundering. These issues appear to be a factor in creating distinct variations in the nature and quality of reporting by individual institutions, and overall the level of reporting appears to be low relative to the size and nature of the financial markets.
13. In the domestic sector, the reporting of suspicions of terrorist financing has only been extended to institutions subject to the supervision of the central bank, but it is not incorporated in law and regulation. Within the DIFC, the DFSA originally sought to deal with the issue by revising the definition of money laundering to include terrorist financing, but has decided to amend its legislation to provide explicitly for rule-making powers with respect to terrorist financing.
14. The basic systems and controls requirements for the domestic banking sector go some way towards meeting the FATF standards, but those for the securities and insurance sectors fall well short. Generally, the central bank considers that the overall quality of the banks' AML systems and controls has improved significantly in recent years, but that there still remains room for improvement in many institutions. The same assessment is not possible with respect to securities and insurance, where the inspections programs are far less developed. The provisions covering institutions within the DIFC are extensive and, based upon the examination work carried out by the DFSA, are being implemented effectively, although the volume of business currently being undertaken within the DIFC is relatively small.
15. While some of the regulatory powers of the central bank are specified very generally within the law, they provide a reasonable basis for fulfilling the Bank's responsibilities in a flexible manner, although there would be distinct benefit in formally documenting the central bank's regulatory expectations where they exceed those encompassed within the regulations. The procedures relating to the supervision and regulation of the domestic securities and insurance markets are far less developed, with the insurance sector not yet being subject to any effective AML/CFT compliance monitoring.
There are a limited range of formal sanctions available to the domestic regulators, but the central bank, in particular, has sought to draw on various general powers to bring institutions into compliance, although there remains a lack of evidence as to how these are used specifically for AML/CFT issues. The structure, powers and procedures of the DFSA are generally in line with international standards, although it is early days within a market that remains relatively very small in terms of business volumes.
16. The central bank has taken a strong lead internationally in addressing the informal remittance sector (hawaladars). The approach domestically has been to institute a voluntary registration process, on the basis that this will encourage the hawaladars to move closer to the formal sector. Registrants are required to submit data to the central bank on all their remittances and, where appropriate, to file Suspicious Transaction Reports (STRs). However, in view of the voluntary nature of this structure, the central bank has no legal authority to conduct inspections or to sanction hawaladars for noncompliance with its requirements. While the voluntary registration process provides a positive start, the system needs to be formalized, based on proper legal powers for the central bank.
17. While there is evidence of the willingness of the domestic regulatory authorities to cooperate with domestic and foreign counterparts, their governing laws are silent on the mechanisms and safeguards necessary to ensure the effective and proper exchange of confidential information. The provision of such legal gateways would be an important development. These exist with respect to the DFSA, which has entered into a number of bilateral Memorandum of Understanding (MOUs), and is also a signatory to the International Organization of Securities Commissioners (IOSCO) Multilateral MOU.
Preventive Measures — Designated Non-Financial Businesses and Professions
18. While the authorities believe that most DNFBPs are captured by the requirements of the AML law, there are almost no specific requirements in place in relation to any categories of DNFBPs in either the domestic sector or the commercial free zones, of which about 30 have been created throughout the UAE. Indeed, many DNFBPs are not aware that they are subject to the provisions of the AML law. Lawyers and accountants are not captured by the definition of affected entities in the law, and only auditors are required to file STRs in accordance with a circular issued by the ministry of economy. Casinos are illegal in the UAE.
19. Provisions are in place, however, for DNFBPs in the financial free zone, as the DFSA has issued rulebooks for lawyers and accountants who are offering ancillary services to financial institutions operating in the DIFC. At the time of the on-site visit, the Dubai International Financial Center Authority had drafted rules for all DNFBPs operating in the financial free zone.
Subsequent to the mission, DIFCA issued its AML/CFT Regulations applicable to DNFBPs which became effective on July 18, 2007. These rules address CDD arrangements and enhanced due diligence for higher risk categories of customer, business relationship or transaction, including politically-exposed persons (PEPs). They are not taken into account for the purposes of this report because their implementation falls outside the timeframe of the assessment.
Legal Persons and Arrangements & Non-Profit Organizations
20. The UAE appears, in principle, to have a culture of strong control over the activities of the corporate sector in the domestic economy. Ownership details have to be submitted (and verified against identity documents) at the time of registration, and the law requires any changes to be notified and approved by the authorities. All such information is accessible to the investigatory authorities and the relevant registration departments have broad powers to enter premises, to review documents and to require the submission of information. However, given the tight controls over foreign ownership of domestic enterprises and the very sizeable expatriate community, the mission could not be satisfied that the measures would prevent "fronting" by UAE nationals on behalf of foreign interests.
The increasing number of free zones designed to be open to foreign investors, also present particular challenges. While the vetting procedures over ownership are similar to those for domestic businesses, and the operations must generally have a physical presence in the free zone, provisions in some zones now permit the creation of pure offshore companies that are not subject to the same requirements. However, such structures are not permits within the DIFC financial free zone.
21. There is no provision for the creation of trusts or similar arrangements under UAE federal law and foreign trusts are not recognized. However, uniquely trust law has been created in the DIFC, which provides for the creation of express trusts. Such arrangements must be administered by trust service providers authorized by the DFSA, which are subject to CDD and record-keeping requirements.
22. The UAE has reviewed the adequacy of the existing laws and regulations that relate to nonprofit organizations. All nonprofit organizations (NPOs) are licensed either by the ministry of social affairs or by the Department of Islamic Affairs and Charitable Activities (for charities operating in Dubai). Both conduct on-site visits of the NPOs. It is possible to create a charitable trust in the DIFC, but no supervisory system is in place to monitor such vehicles. No such charitable trusts have been authorized or created in the DIFC.
National and International Cooperation
23. A national, coordinated and strategic approach to AML/CFT is urgently required. Recently enacted laws concerning national and international cooperation, including mutual legal assistance, appear comprehensive and workable, presenting little if any barriers to effective implementation. While the recent enactment of the law and a lack of statistics do not permit an analysis of effectiveness, current approaches to this area and recent law enforcement success in multinational task forces augur well for further positive developments in this area of the AML/CFT regime.
24. While the two national committees responsible for AML/CFT provide high-level direction, there is an urgent need for a national strategic plan for AML/CFT to be developed with operational sub-committees ensuring an ongoing and coordinated delivery of strategic goals and objectives. Divergent approaches to AML/CFT enforcement across sectors and emirates are a cause for concern.
Other Issues
25. The absence of meaningful statistics was a significant hindrance to the progress of the assessment. With only minor exceptions, the level of effectiveness of AML/CFT measures across all sectors was difficult or impossible to gauge. The development of a national strategy for AML/CFT must urgently address this issue if recent progress is to be built upon. (IMF18.09)
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11.5 UAE: Food and Drink Report for Q3 2008
Research and Markets (http://www.researchandmarkets.com) has announced the addition of the "United Arab Emirates Food and Drink Report Q3 2008" report to their offering. The United Arab Emirates Food and Drink Report provides independent forecasts and competitive intelligence on United Arab Emirates' food and drink industry.
How to deal with rising food prices is once again the main concern for the UAE's government and food and drink industry, as discussed in BMI's recently published UAE Food & Drink Report for Q308. First the government announced in March that it is considering building a strategic food reserve as a means of controlling supplies and curbing inflation. The Economics Ministry has said that it is now conducting a feasibility study on building a reserve of six months worth of staple foods. Then in April two of the UAE's leading MGR operators, Emke Group and Carrefour, agreed to price caps with the government. According to the Memorandum of Understanding signed by the Ministry of Economy and both retailers, they will maintain 2007 prices for a group of basic food commodities to help curb inflation. This followed a similar agreement with the Union Co-Operative Society, as the government looks to control prices.
However, naturally, such price caps have had negative repercussions, not the least of which have been severely squeezed profit margins for retailers and food importers. In May rice importers in the UAE were demanding a minimum of a 25% subsidy for rice due to rising international prices. Because so many food prices have been fixed in an effort to curb inflation, many importers complain that their margins are now so reduced that they are selling at a loss. ‘International rice prices are going through the roof, so by fixing prices at 2007 levels without subsidies, the government is not taking into consideration what importers will have to face and giving room for a black market,' said one importer. Rice is a very popular and important basic food in the UEA: according to the traders association, the country imported around 750,000 tonnes of rice last year, mostly from India, Pakistan, Thailand and Egypt.
With the country so heavily dependant on food and drink imports, these issues become an even greater concern. Therefore the government is taking various tactics to increase food security. One such move has been to cooperate with private equity group Abraaj Capital to purchase Pakistani farmland. Given its unsuitable climate for agricultural development, the UAE must look abroad if it is to significantly expand its agricultural output. With its vast agricultural potential, but limited financial resources, Pakistan could be the perfect partner for the cash-rich and land-poor UAE. Abraaj Capital specializes in private equity investments in the Middle East, North Africa and South Asia, managing $5bn of assets across this region. The firm has been steadily building up its portfolio of Pakistani farmland over the last year. With the UAE's economy remaining robust, and a forecast real GDP growth of 7.7% for 2008, the government is in a strong position to invest in such projects. However, despite the government's abundance of petrodollars, just how to deal with rising food prices will continue to remain a challenge moving forward. (R&M18.09)
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11.6 UAE: Abu Dhabi - Investment Goal
The global economic slowdown is encouraging a spending spree from oil-rich governments in a wide range of sectors. After the Carlyle Group, Citigroup and New York's Chrysler building, investors in Abu Dhabi are looking to opportunities presented in sport and film production.
The Oxford Business Group observed that the Abu Dhabi United Group for Development and Investment (ADUG), a special investment vehicle set up by prominent Emirati businessmen, has recently bought English premier league team Manchester City Football Club. Sulaiman Al Fahim, front man of ADUG, announced that Manchester City's owner, Thaksin Shinawatra, the ex-Thai Prime Minister, had agreed to the takeover bid. According to the local press, negotiations between the football club and ADUG began three weeks ago and were completed early September in Abu Dhabi. Financial details and terms of the deal were not made available, but it is believed to be in the region of $360m. The consortium will be given all management rights.
With the ink still wet on the buyout contract, ADUG financed the purchase of Brazilian footballer Robinho for a British transfer record of $58.3m. On buying the club, Al Fahim told the local press, "We will release details later, but this is a great event for both the club and Abu Dhabi." From the emirate's perspective, the deal will go a long way in increasing its reputation as a capital for both sports and economics.
It was in a similar style that Mubadala, a government-owned investor, helped bring Formula One to Abu Dhabi, beginning in 2009. It was its purchase of a 5% stake in Ferrari in 2005 that got the proverbial ball rolling in hosting the annual motor race. Al Fahim's promise "to open new horizons in all kinds of sports", appears to be in line with the state's sagacious economic strategy to diversify its economy away from oil and gas.
It is, however, thanks to a windfall of petrodollars that Abu Dhabi - which sits atop 95% of the United Arab Emirates (UAE)'s oil - is awash with liquidity. Pumping 2.6m barrels per day, the UAE capital has enjoyed healthy current account surpluses and will generate more than $100bn in surplus this year alone. Having such financial buoyancy has made investing abroad an attractive option. Moreover, the onset of the global economic slowdown has meant that many foreign economies welcome international investment with open arms, albeit with occasional terms attached.
Abu Dhabi has taken full advantage of this: in July, Mubadala's $800m purchase of New York's iconic Chrysler building attracted international attention. In September 2007 Mubadala bought 7.5% of one of the world's largest private equity firms, the Carlyle Group for $1.35bn. In November last year, the Abu Dhabi Investment Authority invested $7.5bn to acquire a 4.9% stake in Citigroup. Other investments have included an $8bn partnership deal between Mubadala and General Electric (GE) in July. Together they plan to invest in a clutch of industries across the region. The Middle East represents one of GE's fastest growing markets, generating around $5bn of its $172.9bn in revenue last year.
Most recently, Abu Dhabi recently announced plans to invest $1bn in a media firm, to be called "imagenation abu dhabi". The company will produce eight feature films a year, over a period of five years, in enterprises with Hollywood, Bollywood and local producers. It is via state-owned Abu Dhabi Media Company (ADMC), owner of a slew of print and broadcast firms, that imagenation abu dhabi will be launched.
The Financial Times stated that the media company will release its first co-production partnerships in the coming weeks. Many industry insiders view Abu Dhabi as trying to position itself as the Gulf's leading media hub. Although it faces stiff competition from neighboring Dubai, Abu Dhabi is already home to some of the biggest media names in the Arab world, such as Emirate Media Inc. (EMI).
Clearly, Abu Dhabi's policy agenda is to broaden its economic base away from oil and gas into services, tourism and manufacturing. While its international conquests and movie enterprise help to diversify revenue streams, they also create international awareness and, not least of all, a buzz about the emirate, both regionally and internationally. (OBG18.09)
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11.7 UAE: Dubai - Export Boom
Although the global economy is flirting with recession, the Oxford Business Group says that Dubai is recording strong growth in foreign trade, with imports, exports and re-exports more than doubling in the first six months of this year. According to a report issued by the statistics department of state-owned corporation Dubai World (DW) on 7 September, the emirate's direct foreign trade totaled $80.8bn in the six months ending June 30, a 54.4% increase on the $52.3bn for the first half of 2007. Imports between January and June rose by 52.7%, hitting $56.1bn, while exports increased by an even higher rate, 59.1%, for a total of $5.47b, the report stated.
The list of Dubai top trading partners reflects a shift in the world economy, away from traditional markets in the West and towards Asia. India and China are currently the emirate's main source of imports, with India also the lead destination for goods exported from Dubai.
Saeed Al Qaizi, DW's director of procurement, contracts and statistics, said the growth reflected the strengthening position of Dubai as a global trading centre. "Excellent development of infrastructure and reinforcement of its competitive potentials have helped Dubai to become an attractive economic hub for investments in diverse areas," he said in a statement accompanying the release of the figures. "This is clearly reflected in the Statistics Department report, which has been prepared from carefully documented data of the trading activity in the emirate."
Another report issued in late August by the Dubai Chamber of Commerce and Industry (DCCI) also showed the emirate was enjoying an export boom. According to the chamber's report, the value of Dubai's exports and re-exports in the first half of the year amounted to $28.2bn, an increase of 50% over the first six months of 2007. While the two reports show strong growth in Dubai's foreign trade, the weak state of the US dollar, to which the dirham is pegged, must also be taken into account.
With the US currency losing more than 13% in value over the first half of the year, the cost of imports has been pushed up, which in turn will have had an impact on export and re-export figures. The link to the dollar has also been blamed for contributing to rising inflation in Dubai and the rest of the United Arab Emirates (UAE), with price rises surging to a record 13% in the first half of the year, according to a report by Merrill Lynch issued on September 9. Even stronger than the overall expansion of Dubai's export trade was the rise in its re-export business, the importing and then re-sale of goods to third countries, the DW report stated, with the re-export trade generating $19.1bn in the first half.
India again headed the list of importers of re-exported material from the emirate, with trade increasing from $2.1bn in the first six months of 2007 to $6bn in the same period of this year. Iran moved into second place in the list of re-export destinations, with shipments rising by 25.9% for a total value of $2.8bn.
The fact that Iran remains one of the main destinations for re-exported goods from Dubai may concern some, especially in the US. In December 2007, Washington claimed that electronic components re-exported from Dubai to Iran could be used in the production of improvised explosive devices similar to those used against coalition forces in Iraq and Afghanistan. Dubai rejected allegations of "an alarming lack of oversight" in monitoring re-exported US goods destined for Iran and Syria, made by a senior US Commerce department official, with Dubai Customs issuing a statement saying it had been active in "establishing controls for dual use materials which were in line with internationally approved and accepted lists". Should Washington increase pressure on Dubai to curb its re-export activities with Iran, the emirate's trade figures could suffer.
Perhaps ironically, the rate of US exports to Iran has boomed during the term of the Bush administration, growing from $8.3m in 2001 to $146m last year, according to US trade data. It is also significant that Dubai's re-export figures are three and a half times those of its direct export sales. While the emirate has invested heavily to develop indigenous non-oil related industries as it seeks to diversify its economy, it is clear that Dubai has retained its traditional role in the region as a centre of trade and commerce, rather than of production. (OBG18.09)
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11.8 UAE: Northern Emirates Port Plans
The main port of the northern emirate of Fujairah is to undergo a major upgrade, as noted by the Oxford Business Group, bolstering its importance to the economy of the United Arab Emirates (UAE) and the region. On August 9, port authorities announced they had secured a $245m loan to fund an expansion of existing facilities and the construction of new facilities. It was the first time that the state-owned firm that owns the emirate's shipping hub, the Port of Fujairah (POF), had ventured into the open money market, having funded previous expansions through internal cash generation.
POF Chairman Sheikh Saleh bin Mohammed Al Sharqi said that the loan, organized through the National Bank of Fujairah and the Commercial Bank of Dubai, had been heavily oversubscribed. This was a testimony to the strength of the company and the future of the port, he said. “We have clearly defined our expansion plans and their objectives, which will benefit not only the port but also the commercial support services in Fujairah and the rest of the UAE,” Al Sharqi told the local press. The loan will assist the POF in realizing its growth objectives, according to Captain Mousa Morad, the port's general manager.
The proceeds of this facility will be utilized by the port for a major infrastructure expansion, which will benefit the emirate for many years to come, he told local media. Banks recognize the intrinsic merits of the expansion plan and the benefits that will flow from it.
Though the exact details of the port expansion were not made public, it is speculated that the loan might be used to upgrade the port's container services. Currently, the port's container terminal is not being used to full capacity, and Dubai Ports World - the company that leases the quay and cranes - has expressed a wish for the port to be able to handle more containers and unload larger vessels, according to the local press. The port could take on added economic and strategic importance if a proposal by Dubai authorities is passed to build a $200bn canal that would bypass the Strait of Hormuz. The plan, floated in early September, would link the Arabian Gulf with the Gulf of Oman at Fujairah. Not only would the canal ease the congestion in the Strait of Hormuz and reduce the potential threat to international oil supplies in the event of war, it would greatly increase economic activity at Fujairah and its port.
More concrete than the canal proposal is the pipeline that Abu Dhabi is building to connect the Habshan oilfields to Fujairah. The 360-kilometre link is due to begin transporting oil in 2010, and will have a capacity of 1.5m barrels per day. Though the pipeline will reduce tanker traffic in the Strait of Hormuz by less than 10%, it will result in a massive increase in activity at the port of Fujairah.
Since commencing operations in 1984, Fujairah has developed into one of the world's largest bunkering centers, ranked alongside Rotterdam and Singapore as a major global refueling port. Over the years it has undergone a number of expansions, significantly in 2002 when the port's basin was expanded to a depth of 15 meters to allow larger vessels to berth and the main quay extended by 600 meters, along with storage area added for containers. In 2005, an additional 720 meters of tanker berths were built in response to the port's increasing importance as a bunkering and oil loading facility. The port currently has an annual bunkering volume of around 12m tonnes, a capacity set to increase in the coming years.
In March, marine fuel products supplier Chemoil announced plans to further expand its storage facilities at the port by as much as 600,000 cubic meters (cbm) by 2010. Currently, the company has 109,000 cbm of storage capacity at Fujairah, of which 60,000 is leased from another firm, Vopak.
One of the main advantages Fujairah enjoys as a bunkering and oil loading port is its location, 130 kilometers to the south of the entrance to the Strait of Hormuz. This allows large numbers of vessels to anchor safely off the port while waiting to pass through the strait to take on fuel, rather than adding to the congestion within the waters of the Arabian Gulf.
Nevertheless, Fujairah is facing increased competition from other ports along the eastern Arabian coast. In particular, the Omani ports of Salalah and Duqm on the Arabian Sea and Sohar, down the coast from Fujairah on the Gulf of Oman, have seen massive expansions in recent years. Despite this, Fujairah has established itself as the premier bunkering port in the region, a position it is likely to retain and reinforce in the years to come. (OBG23.09)
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11.9 EGYPT: Binding Ties
Egypt and Libya are looking to enhance their economic ties and taking advantage of their geographical proximity, with the announcement of two major cross-border investment projects in the energy sector. After a summer of officials from both countries shuttling between Cairo and Tripoli, President Hosni Mubarak sat down with Libyan leader Muammar Al Qadhafi last weekend to discuss how to take the relationship to the next level. Energy deals and increased trade are set to boost cooperation between the North African neighbors.
According to the Central Bank of Egypt, trade between the two countries grew 39% last year to $267m. Egyptian exports to Libya reached $141m in the financial year 2006/2007, while Libyan exports to Egypt jumped 75%, reaching $126m. Egypt buys polyethylene, propylene, butane and propane gas and steel products from Libya, and sells mainly rice, dairy products, copper wiring and cables, steel products, paper, pharmaceuticals, chemicals, ceramics, white goods and cement. Trade between the two countries is set to accelerate further, with plans to establish an Egyptian-Libyan border free trade zone that would include industrial, warehousing, trade and tourism projects. However, a timeframe has yet to be announced.
Libya expects to generate at least $36.9bn from its oil industry, and has begun to invest some of its earnings in overseas ventures, including buying stakes in energy projects in Kenya, Sudan and Ethiopia. Egypt is keen to attract some of Tripoli's surplus cash for its own economy. Hussein Sabbour, head of the Egyptian Businessmen's Association, believes Libya's proximity and increasing oil earnings make it a land of opportunity. "Libya has a lot of money and needs modernization," he told OBG. "It needs to build hotels, infrastructure, hospitals, water supply systems and housing. These are projects in which Egyptian companies can be involved," he added.
Egypt's refining capacity could also play an important role in the Libyan economy in years to come. Indeed, Libya may have vast reserves of oil and gas, but its refining capacity, at 378,000 barrels per day (bpd), is half that of Egypt's, which has the highest refining capacity in the Middle East outside the Gulf, according to figures released by the Organization of Arab Petroleum Exporting Countries.
In this context, the two countries have announced plans for a new oil refinery, which will be built west of the Egyptian city of Alexandria with Libyan funding. The plant will have an estimated capacity of 250,000 bpd, and it will be used to process Libyan crude, according to reports by local media. Gas will also serve as a bridge between the two countries, as they are planning to build a natural gas pipeline between Alexandria and Tobruk. The pipeline is expected to supply the eastern side of Libya with Egyptian gas.
Economic cooperation is set to become increasingly strategic for both countries. For Egypt, Libya might represent more than an emerging market next door, with the Libyan government announcing its intention to take its investment in the Egyptian economy up to $10bn within the next two years. According to the Egyptian Ministry of Investment, Libya is already among the top 10 investors in Egypt. This could mean fresh and diversified foreign direct investment for Egypt at a time when traditional investment from countries like the US and the Europe is facing a slowdown.
For Libya, having Egypt as a close partner could yield long-term results. Since re-entering the international community after improved relations with the US and Europe, Tripoli has been trying to bolster its image abroad. Securing support from Egypt, a regional heavyweight, might facilitate those efforts. (OBG26.09)
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11.10 EGYPT: Growth Threatened
The Egyptian economy posted its biggest growth rate of the past 20 years, but the Oxford Business Group said a slowing European economy combined with inflation are casting a shadow over future GDP expansion. Egypt's GDP grew by 7.2% in the fiscal year ending June 30, Minister of Finance Youssef Boutros-Ghali announced recently. The record figures underline the continued success of Egypt's move towards economic liberalization, initiated by the 2004 reformist cabinet and led by the prime minister, Ahmed Nazif. This is the third year in a row that GDP growth has hit above 7%, compared to just 3.2% in 2002/2003, the last year before the new reformist cabinet took office.
The growth in GDP has been particularly spurred by large income increases from some of the country's biggest economic earners, notably the tourism sector and the Suez Canal. Tourism, which accounts directly and indirectly for 11.3% of GDP, saw a 32% increase in revenues, bringing $10.8bn into the economy. Likewise, revenues from the Suez Canal rose by 23.6% to a record $5.2bn, local media reported. Other sectors of the economy experienced significant growth rates as well, such as the construction and telecommunications sectors, at 14.8% and 14.2%, respectively.
Additionally, the steady inflow of foreign direct investment (FDI) into the Egyptian economy has contributed to GDP growth. The Central Bank of Egypt stated that FDI jumped from $11.1bn in the previous financial year to $13.2bn in 2007/2008. Around half of this went into greenfield investments, a third of which were directed towards the energy sector, according to local media. The real estate sector has also seen a surge in growth, and received $400m in foreign investment this year.
FDI is expected to remain strong. The industry sector alone is attracting various new foreign operators, as Egypt's geographical location and lower input costs continue to be an advantage. "There is a huge interest in industrial investment in Egypt," Rachid Mohamed Rachid, Egyptian minister of trade and industry, told OBG in a recent interview. "We are still getting applications for new factories at a rate of about 200 a month." The minister added that investment was directed into various sectors, including petrochemicals, fertilizers, consumer goods, paper, glass, furniture and textiles.
Yet, despite the record numbers, signs hint at slower growth to come. After an average growth rate of 7.3% during the first nine months of the 2007/2008 fiscal year, Egypt saw economic growth dwindle to 6.8% over April, May and June. Beltone Financial, a regional investment bank, issued a report on September 10 that revised its growth expectations from 7.5% to 6.6% for the financial year of 2008/2009, and from 7.8% to 5.8% for 2009/2010.
Some analysts are looking at the European economic downturn as a major threat to the Egyptian economy. "About 40% of Egyptian exports of goods and services are bought by European countries, so if there is a slowdown there, it will be a big thing," Cyrus Sassanpour, representative for the International Monetary Fund in Egypt, told OBG. Sassanpour believes that a slowdown in the European economy could impact Egypt in two related ways. First, it could potentially reduce imports of Egyptian products, as European consumers look elsewhere for cheaper goods. Secondly, the Egyptian pound could strengthen versus the euro. This would not only make Egyptian exports more expensive, but could affect areas such as tourism, by making Egypt more expensive for European holidaymakers. As prices go up, European travelers might be spurred to pursue other, cheaper Mediterranean locations.
Additionally, inflation has been taking its toll on the Egyptian economy, reaching a 16-year high at 22% last July. "Every country has a certain normal level of inflation... but with the economy growing at such a pace, it becomes very hard to keep inflation down. You see this in several emerging economies," said Sassanpour.
In any case, given the European slowdown, Egypt may attempt to sustain a reasonable level of GDP growth through diversifying trade partners, thereby reducing its dependence on traditional export destinations. Over the past few months, members of the Egyptian government have met with officials from countries such as Brazil, Malaysia and India to increase trade and investment relations with these countries. In the future, Egypt's economic development may become increasingly linked to other fast growing, emerging economies, depending less on the European and US markets. (OBG19.09)
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11.11 TUNISIA: Fitch Affirms Tunisia at 'BBB'; Outlook Stable
On 18 September, Fitch Ratings (http://www.fitchratings.com) affirmed Tunisia's ratings at foreign currency Long-term Issuer Default (IDR) 'BBB', local currency Long-term IDR 'A-' (A minus) and Short-term foreign currency 'F2'. The Outlooks on both ratings remain Stable. The Country Ceiling is affirmed at 'BBB+'.
"Tunisia's economy and public finances have demonstrated impressive stability despite a series of external shocks in recent years," said Charles Seville, Associate Director in Fitch's Sovereign Group. Most recently, the government has had to contend with a sharp rise in food and fuel prices, although prices have fallen back in the second half of 2008. Higher prices caused spending on subsidies to rise but the government raised fuel prices and, with the help of buoyant tax revenues, has kept the budget deficit within its 3%-of-GDP target.
General government debt has also continued to decline, though at 50.9% of GDP in 2007, it is the fifth-highest in the 'BBB' rating category. Debt dynamics remain positive and the government is actively reducing reliance on external debt to reduce exposure to currency risk. Depending on how revenues perform, lower world food and fuel prices, combined with a gradual lifting of subsidies on domestic prices, may give the government the flexibility needed to lower the budget deficit more quickly and bring debt ratios closer to its rated peers.
Tunisia now faces a sharp slowdown in the EU, the main market for its goods and services and history suggests growth will moderate in these circumstances. However, a pipeline of foreign investments in energy, infrastructure and industry will underpin growth of at least 5% over the forecast period, and foreign direct investments are substantially higher year-on-year so far in 2008. In aggregate, manufacturing has adapted well to free trade (in non-agricultural goods) with the EU, and higher value- added sectors are growing briskly.
Tunisia has grown in line with the average of 'BBB'-rated countries and has avoided current account imbalances or excessive credit growth. On the contrary, bank credit growth has been relatively subdued. Although the financial sector has weaker prudential indicators than most peers, a high stock of non-performing loans is a legacy issue that is being gradually addressed. Banks are increasing both provisions and capital.
The current account deficit has been contained and funded largely by foreign direct investments in recent years. Overall balance of payments surpluses have led international reserves to increase, strengthening the country's external balance sheet. Ample external liquidity, along with a well-capitalized financial system, will be a pre-requisite for continuing the opening of the capital account. Triggers for positive rating action would centre on continued progress in reducing government indebtedness and strengthening the banking system in a context of sustained rapid growth. (Fitch18.09)
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11.12 PAKISTAN: Moody's Changes Outlook On Pakistan's B2 Ratings To Negative
On 23 September, Moody's Investors Service has changed the outlook on the Pakistani government's B2 bond ratings to negative from stable. At the same time, Moody's has lowered the outlook on its B3 foreign currency bank deposit ceiling to negative. Meanwhile, the outlook on the Ba3 foreign currency bond ceiling remains negative.
The rating actions were prompted by substantial erosion in the country's external liquidity position, and which is not likely to be adequately reversed by prospective external assistance or ongoing efforts at macro-economic stabilization. The negative outlook on the government's bond ratings reflects, in particular, a worsening in access to foreign currency, raising a heightened prospect of arrears and missed repayments.
"After the election of President Zardari, domestic political stability may improve somewhat, but underlying tensions will be difficult to remedy", says Mr. Aninda Mitra, Moody's sovereign analyst for Pakistan. "Moreover, economic stabilization measures are expected to remain under pressure from deteriorating socio-economic conditions as well as a worsening external environment, and key macroeconomic objectives may not be met." "Anticipated foreign assistance from official creditors may not prove timely or sufficient to avert near-term financing problems, while considerable delays in disbursements have already contributed to a greater-than-expected erosion of Pakistan's foreign-exchange reserves," says Mitra.
"As a result, it remains unclear how Pakistan would rebuild its external liquidity in the medium-term, unless either considerably larger amounts of foreign assistance were disbursed, or foreign investor sentiment improved sharply." Mitra emphasizes that the deterioration in the credit outlook also reflected the lack of a credible medium-term macro-economic framework that could sustainably reduce the country's imbalances and reassure investors. "Moreover, the likelihood of further domestic political tumult amidst a growing tide of religious extremism and high inflation could slow structural reform and fundamentally weaken much-needed capacity to generate higher savings, tax revenue and foreign exchange," adds Mitra, who is based in Singapore. "However, if the depletion in unencumbered foreign exchange reserves were to reverse, with reserves rising substantially towards previously high levels, the outlook could be restored to stable," says Mitra. "This would also have to be supported by sustained improvements in Pakistan's current account balance and net capital inflows over the next year or so."
"Pakistan's B2 rating also already reflects a recent weakening of the government's finances, so evidence of a structural improvement, including a reversal of deficit monetization, and a substantial deceleration of inflation could support the shift to a stable outlook," he adds. "However, the balance of short-term and now even medium-term economic and external financial risks confronting the Pakistani government has tilted to the downside, prompting the negative outlook," he concludes. (Moody's23.09)
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11.13 TURKEY: Food & Drink Market - Carlsberg Pulls Out
Research and Markets (http://www.researchandmarkets.com) announced the addition of the "Turkey Food and Drink Report Q3 2008" report to their offering. The Turkey Food and Drink Report provides independent forecasts and competitive intelligence on Turkey's food and drink industry.
The Turkish fast moving consumer goods industry has been experiencing booming growth in recent years on the back of rising disposable incomes. With Turkey's per capita GDP now pushing close to 'high income' territory, as defined by the World Bank, many firms are beginning to realize the potential of this burgeoning consumer market. The pro-business AK Party has been proactively working to move the country toward EU membership. In that vein, it has instigated a number of key institutional reforms which have helped to harmonize the country's business regulatory framework to international standards, while also significantly opening the country to foreign investors.
However, this is not to say that all changes have been positive, and the AK Party has been highly criticized for its alcoholic drinks policies. In fact, in May 2008, following years of frustration with the country's high taxes, Danish brewer Carlsberg decided to pull out of the Turkish market. Carlsberg is now in negotiations to sell its 95.65% stake in its local operations, Turk Tuborg, to its Israeli partner, CBC Group, after having posted seven years of losses in the country. Although stronger levels of competition were also a factor in Carlsberg's decision to withdraw, it was clearly the country's difficult business environment that played the biggest role in Carlsberg's decision. Carlsberg cited the 35% private consumption tax and the 18% value-added tax as major factors in its withdrawal decision, noting that it had made its stance on private consumption tax known to the government many times, stressing what a heavy burden this is for producers.
The country's pork producers are another group that has been very vocal in their complaints against the government's policies towards the industry. Currently the Turkish pork sector is facing a major crisis as production levels have plummeted in recent years. Following a 2004 crackdown, there are only two pig farms left in the country where there were once 25, with the few remaining shops selling pork products now struggling to survive. While production has fallen, the demand for pork products has actually been rising steadily in this predominantly Muslim country, along with growth in tourism and the number of foreigners living in major cities such as Istanbul. Some of the few remaining shops defend the government, saying that it has granted licenses to those shops with good business and hygiene practices. However, even these shops say that they are now facing possible closure, with supplies of pork quickly running out. As most slaughterhouses are having their licenses revoked, the rising demand from hotels, restaurants and shops is not being met, which is leading to a growing illegal trade.
Although the current government has been widely lauded for the improvements it has helped bring about in the country's macroeconomic stability, and the record levels of FDI this has helped attract, there are still many in the food and drink sector who would like to see a serious revision of certain key policies. (R&M18.09)
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11.14 CYPRUS: Food Dominates Cypriot Manufacturing
On 25 September, Cyprus' Statistical Service has announced the publication of the annual report Industrial Statistics 2007. The report provides detailed data on the broad industrial sector, covering manufacturing, mining and quarrying, and electricity and water supply.
In 2007 the performance of the sector showed marks of recovery after the deceleration that was observed in 2006. The real rate of growth (as measured in terms of the value added at constant market prices of 2000 by the chain linking method) is estimated at 1.6% compared with a reduction of 2.5% in 2006 for the whole industrial sector. For manufacturing an increase of 0.9% is estimated, for mining and quarrying an increase of 4.5% and for electricity and water supply also an increase of 3.5%. The major developments within each section during 2007 were as follows.
Mining & Quarrying Up By 9.5% By Value: The mining and quarrying subsector increased by 9.5% at current market prices compared with the previous year. It is estimated that the value added increased from C£27.7 million in 2006 to C£30.3 million in 2007. The value added of the manufacturing section at current market prices reached C£714.8 million in 2007 compared with C£684.2 million in 2006, thus rising by 4.5%. The Statistical Service said this was mainly due to the growth of the other non-metallic mineral products and the basic metals and metal products sub-sections.
Food Is The Biggest Subsector: Food, beverages and tobacco industries, which is traditionally the largest sub-sector, contributed 32.1% to manufacturing value added in 2007, which remained constant at C£229.7 million. The continued growth of the construction sector enabled the sub-sector of “other non-metallic mineral products” to increase its contribution to value added and reach C£115.6 million compared with C£109.7 million in 2006 at current market prices, registering an increase of 5.4%. The group therefore remained the second largest in manufacturing.
The price index of domestically produced manufactured goods rose by 4.5% over 2006, compared with a 3.0% increase in the previous year. This is attributed to an increase of 4.9% in local market prices and 0.2% in export prices. Industrial exports increased significantly from C£199.8 million in 2006 to C£218.4 million in 2007. Exports to the countries of the European Union constituted 58.1% of the total, exports to the countries of the Middle East 14.4% and exports to other countries 27.5%.
Expenditure on fixed assets in the sector decreased to C£101.9 million during 2007 compared with C£118.4 million in 2006. Machinery and equipment accounted for 50.2% of total investments, new buildings and works for 36.4% and transport equipment for the remaining 13.4%.
Employment in the manufacturing sector increased to 37,200 people compared with 36,700 thousand people in 2006. The percentage share of unemployment in the section to the total unemployment in the economy is estimated at 9.3%, with average unemployment reaching 1,433 persons in 2007 compared with 1,526 in 2006.
Electricity & Water Supply: During 2007 there was an increase in the rate of growth of this sector, estimated at 8.0% compared with 5.4% in 2006. The value added at current market prices reached C£176.1 million. Sales of electricity rose by 3.9% to 4.298 million kWh in 2007 from 4.135 million kWh in 2006. Consumption of electricity by households increased by 7.1%, electricity for water pumping purposes by 6.7% and electricity for public lighting by 2.1%. Consumption of water in towns is estimated to have increased by 1.5% to 32.2 million tonnes compared with 31.7 million tonnes in 2006. (CSS25.09)
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11.15 BULGARIA: Pharmaceuticals & Healthcare Report for Q3/2008
Research and Markets (http://www.researchandmarkets.com) has announced the addition of the "Bulgaria Pharmaceuticals and Healthcare Report Q3 2008" report to their offering. BMI's Bulgaria Pharmaceuticals and Healthcare Report provides independent forecasts and competitive intelligence on Bulgaria's pharmaceuticals and healthcare industry.
BMI's revised Business Environment Rankings for Q3/08 once again finds Bulgaria in the joint second position, alongside the Czech Republic, but this time also alongside Latvia, out of the 17 regional markets surveyed in CEE. Bulgaria's recently attained EU membership and a favorable business climate have resulted in the improvement in the country's longer term pharmaceutical market outlook, which is already being recognized by foreign firms. Large European companies are already active in the market, having acquired shares in local players, which are mainly engaged in the production of generic medicines.
Generic drugs presently account for over a quarter of the market by value and will continue to gain shares at the expense of the costlier, patented variety. In the first three months of 2008, Actavis Bulgaria launched a number of new generics, including cardiovascular agents fosinopril and lisinopril, oncology drugs irinotecan (generic version of Pfizer's Camptosar) and bicalutamide, and antidepressant sertraline (generic version of Pfizer's Zoloft). Domestic companies are also using their clout to expand regionally. To this end, in March 2008, Bulgarian drug maker Sopharma announced that it is planning a regional expansion, as it attempts to bolster its bottom line. To facilitate the move, Sopharma has formed a joint venture with Polish Natur Produkt Zdrovit and is also on the verge of buying a pharmaceutical plant in Serbia.
However, chronic funding shortages plaguing the healthcare sector will continue to hamper the government's attempt to modernize and improve services. Nevertheless, the new Health Minister appointed following a recent cabinet reshuffle – is committed to allocating around 5% of GDP is needed for healthcare. The Minister was quick to emphasize the importance of developing a national healthcare strategy and the fact that serious structural changes would be implemented throughout every level of the system.
In fact, the government is already planning to liberalize the health insurance sector in the hope that private sector involvement would increase efficiency and introduce competition, bringing down the cost of premiums. The cabinet is thought to be considering ending the monopoly of the NHIF, with a number of models proposed. The result could be that the NHIF would be the only distributor for basic health care packages, while private insurers would compete for the remaining coverage. While the changes have the potential to bolster the growth of the pharmaceutical market, forecasts – which have recently been revised upwards after the new IMS Health figures were released - will continue to reflect improved opportunities for manufacturers of long-term and chronic treatments, an increase in foreign direct investment (FDI) and the introduction of higher-quality and thus more expensive products as replacements for medicines not compliant with EU standards. (R&M22.09)
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- Israeli Shekel conversions done at a rate of NIS 3.50 = $1.00
- Turkish Lira conversions done at a rate of NTL 1.10 = $1.00
- Euro conversions done at a rate of € 1.00 = $1.50
- Jordanian Dinar conversions done at a rate of JD 1.00 = $1.41
- UAE Dirham conversions done at a rate of Dh 3.66 = $1.00
- Omani Rial conversions done at a rate of OR 0.385 = $1.00
- Pakistani Rupee conversions done at a rate of Rs 60 = $1.00
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