TOP STORIES
TABLE OF CONTENTS:
1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS
1.1 Knesset Approves Ban on Sale of Alcohol at Night
1.2 New Bill Proposes More Transparency at Investment Houses
1.3 Fischer Says Haredim Not Working "Unsustainable"
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2: ISRAEL MARKET & BUSINESS NEWS
2.1 Citi Announces Bank of Israel Most Credible Central Bank
2.2 IBM Acquires Storwize for its Innovative Real-time Compression Capabilities
2.3 Israir Airlines Selects Hamilton Sundstrand APS3200 Auxiliary Power Unit
2.4 Commtouch to Acquire the Antivirus Division of Authentium
2.5 JetBlue & EL AL Agree to Connect Customers Between U.S. and Israel
2.6 ClioSoft Selects AST for Distribution and Technical Representation in Israel
2.7 Rosetta Genomics Names Genekor Exclusive Distributor for Three microRNA-based Assays in Greece
2.8 Herley's $2.3 Million in International Bookings to Be Produced in Israel
2.9 eXelate Closes $15 Million Round of Funding
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3: REGIONAL PRIVATE SECTOR NEWS
3.1 Boeing & Qatar Announce Order for Two Additional 777s
3.2 UAE Food Products Consumption Valued At $4 Billion
3.3 Double Crown Group Signs Franchises Extreme Pita & Purblendz for Oman
3.4 Natus Medical Receives $2.7 Million Order for Newborn Care Products
3.5 Nike Seals Distribution Deal for Saudi Arabia
3.6 Ex-Im Bank Approves Export Financing For Sale of U.S. Recycling Equipment to Turkey
3.7 Hilton Opens First Property on Bulgaria's Black Sea Coast
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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS
4.1 SDE has Finalized the Construction of the First Sea Wave Power Plant in Jaffa Port, Israel
4.2 Enolia Solar Systems to Install 1.5MW of SolarEdge Power Harvesting Systems in Greece
4.3 Environmentally Friendly Fertilizer Co Ecofer Raises NIS 2.47 Million
4.4 Delay of Turkish Renewable Energy Law Irks Investors
4.5 Greece Passes New RES Law
4.6 Greece Presents Energy Projects
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5: ARAB STATE & PAKISTANI DEVELOPMENTS
5.1 Lebanon's Inflation Drops To 3.5% in June
5.2 Jordan & S. Korea Sign $70 Million Loan Agreement To Build Nuclear Research Reactor
5.3 Jordan Budget Gap Shrinks Over Spending Curbs
5.4 Jordan Tourism Revenues Up 19% In June
5.5 Iraq Signs Electricity Deal With French Firm Alstom
5.6 Study Finds GCC's Construction Pipeline Worth $1.368 Trillion
5.7 IMF Urges Kuwait to Reduce Its Government's Current Spending
5.8 Qatar's Annual Headline Inflation Registers -2.8% In June
5.9 FDI Inflows Into the UAE Fall 71% y-o-y in 2009
5.10 School Fees Drive Dubai's Inflation Rate in First Half
5.11 Saudi Hands Out $16 billion In Construction Deals In 2010's First Half
5.12 Saudi Arabia Still the Largest Recipient of FDI in West Asia in 2009
5.13 Egypt's Real GDP Growth Accelerates to 5.9% in Q4 2009/2010
5.14 Egypt Deficit in First Half is 8.3% of GDP
5.15 Egypt Signs Free-Trade Deal With Mercosur Bloc
5.16 UN Says Egypt Ranks Second FDI Recipient in Africa
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6: TURKISH, CYPRIOT, GREEK & BULGARIAN DEVELOPMENTS
6.1 Turkish Inflation Rate Falls In July For Third Month
6.2 Turkey's June Trade Deficit Widens To 22-Month High
6.3 Iran & Turkey Sign $1.3 Billion Gas Pipeline Deal
6.4 Turkey Yet To Harness Huge Solar Energy Potential
6.5 S&P Confirms Bulgaria's BBB Credit Rating
6.6 Bulgarian Cabinet Approves 2011 Draft Budget Framework
6.7 Bulgaria's Trade Deficit Halves in 2009
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7: GENERAL NEWS AND INTEREST
*ISRAEL:
7.1 Israel Goes To the Aid Of Burn Victims In Democratic Republic Of Congo
7.2 Greece & Israel to Tighten Ties After PM's Visit
*REGIONAL:
7.3 Bulgaria's Population Crisis Worsens Despite Rising Birth Rate
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8: ISRAEL LIFE SCIENCE NEWS
8.1 Can-Fite's CF102 Decreased Viral Load of HCV in 3 Patients with Liver Cancer
8.2 Zetiq Reports CE Conformity for Its Cervical Cancer Diagnostic Kit
8.3 New Invention at Weizmann Institute Enables Severely Disabled To Communicate By Sniffing
8.4 InsuLine Raises NIS 21.5 Million in Tel Aviv IPO
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9: ISRAEL PRODUCT & TECHNOLOGY NEWS
9.1 FiberHome Selects Celeno to Support Shanghai Telecom with Wireless HD IPTV
9.2 Camtek Receives Order for Multiple Wafer Inspection Systems
9.3 Ashdod Port Integrates SAP & ORACLE Using Magic Software's iBOLT Business Integration Suite
9.4 TowerJazz's CMOS Sensor Process Powers Cypress' New Global Shutter Image Sensor
9.5 Altair Semiconductor Unveils TD-LTE Reference Design for Wireless Terminal Manufacturers
9.6 Ness Signs $12 Million Dispatching System for Distribution Network Management at CEZ
9.7 BroadLight Launches 3rd Generation 40nm GPON Fiber Access Processor Family
9.8 Mellanox InfiniBand Provides the Networking Foundation for the University of Cambridge's HPC Cloud
9.9 BOE Signs Major, Multi-Million Dollar Agreement for Orbotech Systems
9.10 PerSay Introduces Biometric Authentication for iPhone Apps
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10: ISRAEL ECONOMIC STATISTICS
10.1 Israel's July Tax Revenues Reach All-Time High
10.2 Yisrael Hayom Becomes Israel's Most Popular Print Newspaper
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11: In Depth
11.1 ISRAEL: Citi Finds Impact of Conflict on Israeli Market Low
11.2 SAUDI ARABIA: What Does "Reform" Mean in Saudi Arabia?
11.3 SAUDI ARABIA: Full Steam Ahead
11.4 EGYPT: BP Closes Gas Deal
11.5 EGYPT: Airlines Flying Far
11.6 TUNISIA: Economy Reality Check
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1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS
1.1 Knesset Approves Ban on Sale of Alcohol at Night
On 21 July, a bill forbidding stores, kiosks and gas station convenience stores from selling alcohol between 11 pm and 6 am passed its second and third readings. Law will not apply to pubs or duty free outlets. The bill was approved unanimously, with no opposition and no abstentions. On 19 July, the joint committee of the Internal Affairs & Environment Committee and the Constitution, Law & Justice Committee rejected the bill to prohibit the sale of alcoholic beverages in businesses next to gas stations at all ours of the day. Constitution, Law & Justice Committee Chairman Rotem (Yisrael Beiteinu) proposed the bill in order to prevent young adults stopping for gas from loading up on alcohol as well. However, under pressure from the gas stations and adjacent businesses, the committee was ultimately convinced that a sweeping prohibition puts the gas station businesses at an unfair disadvantage and unjustly harms competition. This was made out of consideration for the fact that in many urban centers, alcohol can be obtained at stores and kiosks not far from the gas stations. (Various 21.07)
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1.2 New Bill Proposes More Transparency at Investment Houses
Privately-owned investment houses will be required to disclose information and comply with the standards for corporate reporting and governance, according to a private member's bill submitted by MK Cohen (Shas) and MK Kirshenbaum (Israel Beiteinu). Later, they may be required to publish full financial reports and the salary details of their five top paid executives, as already required by privately owned banks and insurance companies. Privately-owned investment houses manage NIS 196 billion in public assets. Companies include Psagot Investment House, Altshuler, Shaham & Meitav Investment House, Tamir Fishman and Infinity Private Equity. Other investment houses are subsidiaries of public companies, such as Epsilon Investment House and Migdal Capital Markets. Cohen and Kirshenbaum submitted the bill to the Knesset in late July. In October, when the Knesset returns from its summer recess, the bill will be submitted to the ministerial legislative committee. Cohen said that discussions were already underway with committee members to obtain a major in favor of the bill. He believes that the government will support the bill. (Globes 26.07)
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1.3 Fischer Says Haredim Not Working "Unsustainable"
Governor of the Bank of Israel Fischer told foreign correspondents in mid-July that one of the greatest challenges faced by the Israeli economy was dealing with poverty in the Haredi (ultra-orthodox) population, and that the problem was worsening. Fischer spoke on 19 July at an annual closed gathering of foreign correspondents in Israel. Fischer said that the problem of poverty was particularly acute in two sectors of the population: Arabs and Haredim, but that while the problem was reducing in the Arab sector, among Haredi it was worsening. About 10% of Israel's population are ultra-Orthodox and about 20% are Arab. (Globes 21.07)
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2: ISRAEL MARKET & BUSINESS NEWS
2.1 Citi Announces Bank of Israel Most Credible Central Bank
Globes reported that Citi analyst David Lubin said, "We think the Bank of Israel has emerged from the crisis as one of the most credible central banks Central and Eastern Europe, the Middle East, and Africa." Lubin explained that the Bank of Israel supported Israel's recovery last year with aggressive measures to loosen monetary conditions, and it is now withdrawing that stimulus in a way that does not threaten the economy. Lubin predicts that Israel's interest rate will reach 2.25% by the end of 2010, after two more rate hikes. "These rate hikes will be needed to maintain the Bank of Israel's commitment to its 'gradual process'," he said. Lubin cited four key factors in the Bank of Israel's analysis to raise the interest rate. The first factor was a commitment to a consistent and smooth stimulus-withdrawal. The second factor was the feeling of need to do something to contain inflation expectations, which have risen in recent months due to the shekel's weakness. The third factor was the Bank of Israel's concerns about house prices and housing credit. The fourth factor was that, despite the rate hike, the real interest rate is still negative and, as the Bank of Israel put it, "monetary policy continues to be expansionary". (Globes 27.07)
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2.2 IBM Acquires Storwize for its Innovative Real-time Compression Capabilities
On July 29, 2010, Storwize entered into a definitive agreement to be acquired by IBM. This acquisition comes after many years of hard work by Storwize in developing the storage industry's only real-time data compression technology that can maximize a customer's storage investment without compromising performance. This acquisition is designed to strengthen our support and service for our existing customers, as well as greatly expand the Storwize channels of distribution. With Storwize, IBM is acquiring storage technology that is unique in the industry in that it can compress primary data, or data that clients are actively using, of multiple types - from files to virtualization images to databases - in real-time while maintaining performance. This is in contrast to other storage compression technologies that only compress secondary or backup data. By compressing primary data, Storwize users can store up to five times more data using the same amount of storage, preventing storage sprawl and lowering power and cooling costs.
Yehud's Storwize (http://www.storwize.com) provides online storage optimization through real-time data compression, delivering dramatic cost reduction without performance degradation. Storwize STN appliances are based on the Storwize's Random Access Compression Engine (RACE) and transparently compress primary storage between 50 to 90 percent without changes in performance, storage, applications, networks or processes. (IBM 29.07)
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2.3 Israir Airlines Selects Hamilton Sundstrand APS3200 Auxiliary Power Unit
At the Farnborough Air Show, Israir Airlines and Tourism selected Hamilton Sundstrand Power Systems' APS3200 Auxiliary Power Unit (APU) for its new fleet of two Airbus A320 aircraft. Hamilton Sundstrand is a subsidiary of United Technologies Corp. The APS3200 APU is currently on board more than 1,600 Airbus A320 aircraft around the world and has accumulated more than 23 million hours since entering service on the Airbus A320 family of aircraft. Israir Airlines and Tourism is headquartered in Tel Aviv, Israel. Launched in 1996, Israir Airlines and Tourism operates scheduled and charter flights to numerous destinations in Europe, the Middle East and domestically with its A320 and ATR fleets. Hamilton Sundstrand Power Systems, based in San Diego, Calif., currently has more than 13,000 APUs in commercial and military service. (Hamilton Sundstrand 21.07)
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2.4 Commtouch to Acquire the Antivirus Division of Authentium
Commtouch signed a definitive Asset Purchase Agreement to acquire the assets, products, licenses, and operations of the Command antivirus division of Authentium, Inc., a Florida-based company. Command antivirus – which also includes technology to protect against spyware, Trojan downloaders and other threats – is strongly synergetic with the rest of Commtouch's product portfolio. With the addition of antivirus technology as a new, third product line, Commtouch will be offering a comprehensive set of solutions for inbound and outbound messaging and Web security to its customers, which are networking and security vendors and service providers. The Command antivirus division currently provides its technology to a notable number of leading service providers and vendors, including Google, McAfee and Microsoft. Certified by Checkmark, West Coast Labs and a winner of multiple Virus Bulletin awards, Authentium's Command antivirus technology boasts a small footprint and a highly efficient event-processing system. Commtouch is expected to pay $4.6 million in cash and an additional "earnout" contingent upon the achievement of certain revenue milestones through December 31, 2011, which may bring the total amount to approximately $8 million.
Netanya's Commtouch (http://www.commtouch.com) provides proven messaging and Web security technology to more than 130 security companies and service providers for integration into their solutions. Commtouch's GlobalView and patented Recurrent Pattern Detection (RPD) technologies are founded on a unique cloud-based approach, and work together in a comprehensive feedback loop to protect effectively in all languages and formats. Commtouch technology automatically analyzes billions of Internet transactions in real-time in its global data centers to identify new threats as they are initiated, protecting email infrastructures and enabling safe, compliant browsing. (Commtouch 27.07)
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2.5 JetBlue & EL AL Agree to Connect Customers Between U.S. and Israel
New York's JetBlue Airways and Israel's EL AL intend to sign an interline agreement, providing new and convenient connecting options for both EL AL and JetBlue customers wishing to travel between the U.S. and Israel. Beginning in September, customers will be able to purchase a single ticket for travel on flights of both carriers in one simple transaction, and enjoy seamless connecting service to Tel Aviv's Ben Gurion International Airport from most JetBlue cities via New York's John F. Kennedy International Airport. Customers traveling on the two carriers will enjoy the convenience of purchasing and traveling on a single e-ticket. In addition, on the day of travel, customers will benefit from simplified one-stop, through check-in and easy connections at JFK Airport. Customers will receive boarding cards for both carriers' flights upon check-in with either JetBlue or EL AL and their baggage will be checked to their final destination. (JetBlue Airways 22.07)
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2.6 ClioSoft Selects AST for Distribution and Technical Representation in Israel
Fremont, California's ClioSoft, developer of the premier hardware configuration management (HCM) system for the electronics design industry, has selected Advanced Semiconductor Technology Ltd. (AST) to be its exclusive distributor and technical representative in Israel. The agreement covers sales and support for ClioSoft's SOS design data collaboration platform, which promotes collaboration and enables efficient management of hardware design data from concept to tape-out. ClioSoft is the premier developer of hardware configuration management (HCM) solutions. The company's SOS design data collaboration platform is built from the ground up to handle the requirements of hardware design flows. (ClioSoft 29.07)
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2.7 Rosetta Genomics Names Genekor Exclusive Distributor for Three microRNA-based Assays in Greece
Rosetta Genomics and Genekor S.A, a leading molecular diagnostic service provider in Greece, announced today the signing of an exclusive distribution agreement for three of Rosetta Genomics' diagnostic tests in Greece. Rehovot's Rosetta Genomics (http://www.rosettagenomics.com) is a leading developer of microRNA-based molecular diagnostics. Founded in 2000, the company's integrative research platform combining bioinformatics and state-of-the-art laboratory processes has led to the discovery of hundreds of biologically validated novel human microRNAs. Building on its strong patent position and proprietary platform technologies, Rosetta Genomics is working on the application of these technologies in the development of a full range of microRNA-based diagnostic tools. (Rosetta 29.07)
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2.8 Herley's $2.3 Million in International Bookings to Be Produced in Israel
Lancaster, Pennsylvania's Herley Industries announced it has recently received contracts totaling approximately $2.3 million for microwave switch assemblies and integrated microwave assemblies for international customers. These products will be produced at the company's Israeli operation, General Microwave Israel Corporation (GMIC). Herley Industries, Inc. is a leader in the design, development and manufacture of microwave technology solutions for the defense, aerospace and medical industries worldwide. (Herley 29.07)
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2.9 eXelate Closes $15 Million Round of Funding
eXelate announced the closing of a $15 million second round of funding led by Silicon Valley's Menlo Ventures with participation of Israel's Carmel Ventures, who led the company's $4 million "A" round. Since eXelate's U.S. launch of the eXelate eXchange in May 2008, the Company has rapidly grown its revenues and expanded both its footprint of accessible audience data (to 150 million U.S. Unique Visitors) as well as its suite of solutions to enable buyers and sellers of data to interact in an efficient, highly-privacy, friendly manner. Most recently, eXelate has been focusing on enhancing these tools to uniquely address the needs of publishers. With the launch of their teXi: Data Management and Private Marketplace toolsets for publishers, eXelate has broken new ground in giving publishers an easy way to centralize data management, privacy and latency monitoring and data monetization functions. eXelate will be leveraging the proceeds from the new round of investment to continue to enhance its data marketplace footprint, as well as expand the functionality of its robust data management toolset.
Kfar Saba's eXelate (http://www.exelate.com) is the world's first and largest open marketplace for behavioral targeting data and the leader in data management tools. Through participation on the eXelate eXchange and access to proprietary data management tools such as eXelate's teXi, data buyers build an instant behavioral targeting function and optimize their campaign delivery, while data sellers gain direct control over their audience data distribution and build a new privacy-friendly income stream. The eXchange includes over 50 top ad network, agency and demand-side platform buyers and dozens of leading publishers, who deliver targeting data on 150M U.S. unique users in lucrative verticals including Business-to-Business, Auto, Travel, Finance, Shopping and registration-based Demographics. (eXelate 03.08)
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3: REGIONAL PRIVATE SECTOR NEWS
3.1 Boeing & Qatar Announce Order for Two Additional 777s
On 21 July, Boeing and Qatar Airways announced an order for two additional Boeing 777-200LRs. The order is valued at $501 million at average list prices. This order was previously accounted for on Boeing's Orders and Deliveries website attributed to an unidentified customer. Qatar Airways, based in Doha, Qatar, already operates six 777-200LRs, 11 777-300ERs and two 777 Freighters. Including today's order, Qatar Airways has 10 777s in unfilled orders. Qatar took delivery of its first 777 Freighter last May. Qatar also has 30 787 Dreamliners on order, and announced it has accelerated 787 deliveries to support its goal of serving 120 key business and leisure destinations worldwide by 2013. (Boeing 21.07)
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3.2 UAE Food Products Consumption Valued At $4 Billion
Total consumption of food products in the UAE alone is valued at almost $4 billion and the outlook for the confectionery, snacks, baked goods and ice cream industry in the Middle East remains upbeat. Hypermarkets, being a key driver of grocery value sales in the Middle East, have fuelled high demand for a diverse range of packaging solutions. The Mena region offers attractive investment opportunities for packaging material, machinery and equipment suppliers, with the region's packaging material market set to hit 25.5 million tonnes by 2014, according to industry research experts Pira International. The Middle East is considered as a region with tremendous growth potential, according to Nestle. Its proximity to the European markets makes it an attractive alternative for western producers looking for low cost production sites. (TradeArabia 21.07)
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3.3 Double Crown Group Signs Franchises Extreme Pita & Purblendz for Oman
Oman-based Double Crown Group has secured the franchise rights to the Extreme Pita restaurant chain and Purblendz smoothie cafes and will open 21 units across the sultanate within the next 10 years. The Canadian chains have entered into a Master Franchise Agreement with the group, which operates the Travellers' Oasis chain in Oman. Extreme Pita already boasts more than 245 locations in North America. Double Crown currently has operations in a range of sectors including agriculture, aquamarine, building materials, engineering, IT hardware & software, education, import & export, FMCG and tourism. (Various 27.07)
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3.4 Natus Medical Receives $2.7 Million Order for Newborn Care Products
Natus Medical Incorporated (San Carlos, California) received a significant purchase order from Saudi Arabia for the company's newborn care products. The order, which is valued at over $2.7 million, was received from the Company's distribution partner working with the Saudi Ministry of Health. The order is for ALGO newborn hearing screeners, Cool-Cap selective head-cooling devices and Olympic Cerebral Function Monitors (CFM). The order is expected to ship by the end of the year. ALGO screeners are the recognized gold standard in newborn hearing screening with clinically proven and well documented sensitivity and specificity. Natus is a leading provider of healthcare products used for the screening, detection, treatment, monitoring and tracking of common medical ailments in newborn care, hearing impairment, neurological dysfunction, epilepsy, sleep disorders, and balance and mobility disorders. (Natus 27.07)
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3.5 Nike Seals Distribution Deal for Saudi Arabia
US sportswear giant Nike has signed a deal to distribute apparel, footwear and accessories in Saudi Arabia. The agreement, signed with Dubai-based retailer Sun and Sand Sports, will see Nike branded goods sold at official outlets throughout the Kingdom. Sun and Sand Sports is part of the Gulf Marketing Group (GMG), which is already the official Nike distributor of the UAE, Oman, Qatar, Bahrain and Kuwait. (Various 27.07)
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3.6 Ex-Im Bank Approves Export Financing For Sale of U.S. Recycling Equipment to Turkey
A New Jersey small business is selling equipment and technology to Turkey to build an innovative plant that recycles metal and in the process recovers gas and produces electricity. A portion of the export sale by Chinook Sciences LLC, Cranford, N.J. to Turkish buyer DT Metal Geri Kazanim Teknolojileri Sanayi ve Ticaret AS (DT Metal) is backed by a $10 million medium-term loan from Northstar Trade Finance, Inc., Houston, Texas. The loan is guaranteed by the Export-Import Bank of the United States (Ex-Im Bank). Using Chinook's patented RODECS gasification technology, Turkey's DT Metal can clean off organic metal coatings such as plastic, rubber, oil, lacquer and paint, and break them down into component molecules of carbon monoxide and hydrogen, which form a synthetic gas (Syngas). The Syngas is burned for steam generation and converted to electricity. It is Northstar's ninth transaction under a new Ex-Im Bank initiative that delegates authority to lenders, enabling the banks to speed approval of Ex-Im Bank-guaranteed medium-term export loans to foreign buyers of U.S. goods. (Ex-Im Bank 21.07)
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3.7 Hilton Opens First Property on Bulgaria's Black Sea Coast
The Doubletree by Hilton Varna will be the first property of the world-class hotel brand Hilton on the Bulgarian Black Sea coast. Hilton Worldwide has signed a franchise agreement with Helios Hotels EAD, a wholly-owned subsidiary of Tetrareal AD, for a new Doubletree by Hilton hotel in Varna, Bulgaria. It is the first Doubletree hotel in Bulgaria and the first Hilton-brand property in the country outside of the capital Sofia. The famous Doubletree chocolate chip cookie, an icon of the hospitality of the brand, has been introduced for the first time in Bulgaria during a special ceremony. While bound by the Hilton franchising contract not to disclose the exact amount of the investment in the new Doubletree hotel, the money invested to re-brand the hotel was about 35% of the original construction investment. The converted Doubletree by Hilton Varna is located in the Golden Sands near Bulgaria's major Black Sea city of Varna. It overlooks the greenery of the Golden Sands nature park and the Black Sea. The company also plans to open another Hilton brand facility - the Hilton Varna. (SMN 22.07)
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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS
4.1 SDE has Finalized the Construction of the First Sea Wave Power Plant in Jaffa Port, Israel
SDE has finalized the construction of the first large-scale sea wave power plant, in Jaffa Port in Israel. In the past, the sea wave energy conversion method has received support from the Chief Scientist of Israel, Ministry of Industry & Trade, approval no. 23425, which had enabled S.D.E. to build eight (8) sea wave power plant models. The last of which, has operated successfully for a period of two years, producing 40KWh. The new sea wave power plant, which is actually the 9th plant built by SDE company, has been finalized and operated in the recent days, proving itself as a better and improved version of the previous models. It can produce 60 KWh (with only one buoys), it is a full automatic model, and only 10% of the whole system is in the waters, which minimizes the risk to the system in cases of storms and other natural disasters. The 60KWh sea wave power plant is an initial stage of a total construction plan of 50MW on the breakwater of Jaffa Port. Jaffa's breakwater is 1,000 meters long and the construction of SDE's sea wave power plant, will provide cost-efficient renewable energy source to the port, as well as prevent the erosion of the breakwater that is usually caused by high waves. In addition, Israel's Electric utility is willing to purchase the electricity from sea waves at a very attractive price of 12 cents per KW. The erection cost of a 1MW S.D.E's power station starts from $650,000 while a comparable station costs $1,500,000 from coal, $900,000 from natural gas, $3,000,000 from solar sources, and $1,500,000 from wind. The system that S.D.E has developed is able to supply 500 times more than the electricity requirements of the whole world population.
Tel Aviv's S.D.E. (http://www.sde.co.il) is a world leader in the planning, building and marketing of power stations, producing power from sea waves. SDE's method consists of using sea wave motion to generate hydraulic pressure, which is then transformed into electricity. The system takes advantage of the wave's speed, height, depth, rise and fall, and the flow beneath the approaching wave, thus producing energy. A full-scale model was operated in Israel and produced 40ekW for almost one year. The model has been checked and approved by experienced engineers. (SDE 27.07)
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4.2 Enolia Solar Systems to Install 1.5MW of SolarEdge Power Harvesting Systems in Greece
SolarEdge Technologies announced a partnership with Enolia Solar Systems, a leading Greek company active in the development of PV projects, trading of PV solar equipment and design and implementation of rooftop applications in the rapidly developing PV markets of Greece, Cyprus and Bulgaria. The SolarEdge power harvesting solution includes PowerBoxes, which are module-integrated power optimizers, solar inverters and a module-level PV monitoring portal. This unique solution enables production of up to 25% more energy from any PV installation, while reducing costs and complexities. With local feed-in-tariff incentives for installation of rooftop systems and solar farms, the Greek PV market is fast growing. The distributed architecture of the SolarEdge solution allows Installers and system owners of all system types to benefit from constraint-free design and optimal site-area utilization, as well as real-time module-level monitoring for improved maintenance at reduced cost. The SolarEdge solution is complete with built-in enhanced safety mechanisms, high reliability and extraordinary warranty, which all contribute to faster return on investment. Enolia Solar Systems, which has executed large projects in Central Greece, has a current 2010 pipeline of 7.2MWp installations under development and construction in Crete, Lesvos, Rhodes, Voiotia, Larisa and Agrinio, extending to an additional 13 MWp for 2011.
Hod HaSharon's SolarEdge (http://www.solaredge.com) provides the world's first end-to-end Distributed Solar Power Harvesting and PV Monitoring solution, allowing maximum energy production at a lower cost. The SolarEdge PowerBoxes are DC-DC power optimizers that perform MPPT per individual panel while monitoring performance of each panel and communicating across existing power lines. (SolarEdge 28.07)
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4.3 Environmentally Friendly Fertilizer Co Ecofer Raises NIS 2.47 Million
Ofakim Hi-Tech Ventures is raising NIS 2.47 million in investment funding for its portfolio company Ecofer Ltd., which develops environmentally friendly fertilizer systems. NIS 2.1 million of the investment in Ecofer has been approved by the Office of the Chief Scientist, with the balance being invested by the company's entrepreneurs. Capital Point, which owns the Ofakim Hi-Tech Ventures incubator notified the Tel Aviv Stock Exchange about the investment agreement. Ecofer develops automatic fertilizer systems based on software and sensors, which makes using fertilizers cheaper and more efficient. Ecofer's systems enable the farmer to produce, in the crop fields themselves, liquid fertilizers in precise and suitable concentrations for high effectiveness. This fertilizer will provide a substitute for regular liquid fertilizer, which has to be produced in regional terminals and transported by road in containers to a terminal by the field, which involves high transport costs. The new fertilizer system will make fertilizer inputs cheaper for the farmer, enable energy savings and reduce air, ground and water pollution. (Globes26.07)
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4.4 Delay of Turkish Renewable Energy Law Irks Investors
A Turkish draft concerning modifications to the renewable energy law, which has been awaiting a parliamentary discussion for the past year, has been shelved while the legislature breaks for summer recess. Investors in the renewable energy sector are irked by the situation, believing the delay is based on Parliament's preference for nuclear instead of renewable energies. Businesses planning to invest in solar energy have reportedly started to "revise" their plans, with the first bad news coming from the French Datatechnic International Group, which reportedly abandoned plans for the photovoltaic solar panel production it began in Izmir in 2009 despite already investing ₤12 million.
According to the Energy Ministry's figures, 194 billion kilowatts of electricity were produced in Turkey in 2009, 18.5 of which came from hydroelectric power plants, 48.6 from natural gas and 21.7 from coal-based power plants. Some 11.2% of total electricity production, on the other hand, was generated by systems based on imported coal, liquid fuel and other similar resources. Because of Turkey's annual growth rate, which averages between 7 and 8%, energy investments are expected to increase in the years to come, and there were hopes that renewable energies' share in total production would increase as well.
Today, there is a ₤50 million solar energy market in Turkey and almost 10 million square meters of installed solar collectors. However, while the rate of per capita use of solar energy in Austria, for example, is 0.22 kWh, the rate in Turkey is only 0.1. Turkey's current power capacity, meanwhile, is 44,000 megawatts. According to figures announced by the former energy minister, Turkey has a solar energy capacity equivalent in power to 56,000 megawatts to be produced by natural gas-based power plants while Turkey's annual capacity of electricity production through solar energy is estimated at 380 billion kWh. Energy produced solely by installing solar cells on rooftops in Antalya is equivalent to the 3,630 megawatts of energy produced by natural gas-based power plants. Some 150 firms are active in the solar energy market, which has long suffered from legal and regulatory problems.
Hakan Erkan, deputy chairman of Association for Solar Energy Industry and Industrialists, or GENSED, said the solar energy sector is under state control nearly everywhere else in the world. The reason why the draft concerning modifications in the renewable energy law was not put on the agenda was the government's "political preference," Erkan said, adding that the government had thus showed that it preferred nuclear energy to renewable energies. "The energy minister said that some 10 to 14 cents/kWh is enough for solar energy, this figure comes to suggest that the investors should not produce solar energy," he said. (Hurriyet 02.08)
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4.5 Greece Passes New RES Law
In June Greece's government passed a new law to reduce the approval time for renewable-energy investments to as little as eight months from three years. Greece's new Renewable Energy Sources (RES) law is designed to dramatically transform the RES market in Greece and provide a huge opportunity to investors. The law doubles the target for the contribution of RES to electricity consumption in Greece by 2020, originally set at 20% and now set at 40%. The bill also reduces the licensing procedure time from 3-5 years to 8-10 months, provides for discounts in the energy bills of some communities, and introduces a new tariff regime for new RES installations, providing for a 20% higher tariff to investors who choose not to take advantage of state subsidies in their development of RES installations.
The installation of offshore wind farms has been allowed. For the construction and operation of such projects companies must comply with the procedure of Environmental Terms Approval. For the completion of the project and the connection to the grid an open public tender is held. The installation of RES power plants must be in compliance with the General and Special Framework for Land Planning and Sustainable Development for RES. Electricity production is permitted on high production agricultural land provided that the land is covering no more than 1% of all farmland in the specific prefecture. The use of RES in new buildings is mandatory. There is also a provision for energy savings in the building sector. An independent service for RES is being introduced in the Ministry of Environment to act as a «one-stop shop» and will be responsible for providing information to all investors interested in RES. (Various)
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4.6 Greece Presents Energy Projects
On 28 July, Greece's Environment & Energy Ministry announced a very ambitious program of investments in the green economy, totaling €44.44 billion by 2015 and aiming at the creation of over 210,000 jobs, of which 27,000 would be permanent. The energy sector is set to cover most of the development effort in the public and private sectors with a total investment of about €32 billion and the creation of some 169,000 jobs. This concerns a broad range of investments, from interventions for saving energy and exploiting renewable energy sources to pipelines for the transmission of natural gas and storage facilities for natural gas, to power interconnectivity for the islands as well as expansion of domestic consumption of natural gas to more regions of the country. They also include private investments in electricity production and the modernization of the Hellenic Petroleum installations to the tune of €1.6 billion. Nevertheless, while many of the energy investments that Minister Birbili presented to concerned parties are in the planning stage – for instance natural gas storage – others, such as the electricity producing plant at Astakos in western Greece, are controversial. Others yet, such as the interconnections with neighboring countries for the transmission of natural gas, depend on external factors. (Kathimerini 29.07)
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5: ARAB STATE & PAKISTANI DEVELOPMENTS
5.1 Lebanon's Inflation Drops To 3.5% in June
Lebanon's inflation rate fell to 3.5% in June from 4.9% the month before as health and communication costs declined. Prices dropped 0.8% from the previous month, the Central Administration of Statistics said on 21 July. Health costs fell an annual 3.4% and communication declined 0.3%, while water, electricity, gas and other fuels rose 7.6% and education charges increased 9.6%, the statistics office said. (BI-ME 21.07)
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5.2 Jordan & S. Korea Sign $70 Million Loan Agreement To Build Nuclear Research Reactor
On 26 July, Jordan and South Korea signed a $70-million soft loan agreement to help build a nuclear research reactor at an Irbid university in northern Jordan, according to the Ministry of Planning and International Cooperation. The agreement was inked by the Jordanian Minister of Planning and International Cooperation, the South Korean Ambassador to Jordan and the Executive Director of the Export and Import Bank of Korea (Korea Exurban). The loan is the biggest soft loan from the Korean government with a 0.2% interest rate and a grace period of 10 years and will be repaid over 30 years. The project, whose total cost stands at $130 million, is an important keystone for a peaceful Jordanian nuclear program and an integral part of the nuclear technology. The reactor, which will be built at the Jordan University for Science and Technology JUST, is one of the most cutting-edge and modern research reactors in the region. Jordan is currently speaking with the U.S to strike a nuclear cooperation deal. The Korean consortium, which will build the research reactor, has already begun studying the proposed site. The corner stone of the 56-month project will be laid in November this year and will be operational by 2015 after a year of extensive safety tests. The research reactor comes within the Kingdom's efforts to develop a nuclear program for peaceful purposes to desalinate water, generate electricity and turn the Kingdom into an energy exporter by 2030. (Petra26.07)
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5.3 Jordan Budget Gap Shrinks Over Spending Curbs
The Ministry of Finance said Jordan's budget deficit more than halved in the first five months of the year as the government maintained a freeze on non-essential capital spending. They said the shortfall shrank to JD137 million ($193 million) from JD348.3 million in the same period of 2009 - a year which ended with a record deficit of 9% of GDP. The authorities have scaled down tens of millions of dollars worth of non-essential capital projects as part of austerity measures to slash its deficit to 6.3% of GDP this year and help its economy ride out the global downturn. Total expenditure, mainly civil service pay and debt servicing, fell 8.3% to JD2.144 billion until May against JD2.338 billion in the same period last year. Last year, aid-dependent Jordan ran up a record budget deficit of JD1.45 billion or 9% of GDP, much bigger than expected, as public finances came under strain after the global downturn hurt domestic demand and foreign cash flows, including remittances from expatriates in the Persian Gulf. The International Monetary Fund (IMF) and major donors have expressed concern at the high level of government spending relative to the size of the economy. It accounts for more than 45% of the country's GDP. Most of the savings came from a sharp 45% drop in capital expenditure by JD224 million in the first five months of 2010 against the same period 2009, the data showed. As part of the public spending cuts the government is offering major infrastructure projects through private-public partnerships under lucrative terms that attract foreign investors. (Various 21.07)
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5.4 Jordan Tourism Revenues Up 19% In June
The number of overnight tourists and tourism revenues have increased by 24% and 19% respectively during June, official figures showed. Around 709,000 tourists have visited the Kingdom during June, compared to 602.516 tourists in the same month of 2009, up 18%, the Ministry of Tourism and Antiquities announced. The number of overnight tourists reached 382,092 in June compared to 307,584 in June of 2009. Meanwhile, the number of one-day visitors increased by 11% in June to reach 326,915 compared to 294.932 in the same month of 2009. Over 3.63 million tourists visited the Kingdom during the January-June period, a 24.1% increase from 2009, when some 2.93 million visitors toured the country, the figures showed. Some 2.04 million overnight tourists visited the country in the first half of the year, a 31% rise from the same period in 2009, when the figure stood at 1.56 million. Initial figures by the Central Bank of Jordan showed that revenues generated by the tourism sector in the first six months of 2010 reached JD1.089 billion, up 28% from JD851 million in the first half of 2009. (Petra31.07)
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5.5 Iraq Signs Electricity Deal With French Firm Alstom
On 28 July, French energy infrastructure firm Alstom signed an MoU with Iraq to build a power plant in southern Iraq, which is suffering a severe electricity shortfall. It is also set to renovate an existing power plant in the holy Shiite city of Najaf that it built 35 years ago, the company announced. The company has agreed to build a 1,200 MW power station between Najaf and the southern port city of Basra, and to rehabilitate a 180 MW plant in Najaf that it built in 1975. The agreement also provides for training of Iraqi engineers and technicians. Construction of the new plant is likely to cost between $1.5 - $2 billion. The company will begin talks with national and local officials in the coming weeks for the practical implementation of these projects. Iraq's daily power generation averages 8,000 MW, while demand in temperatures that have hit 54 degrees Celsius is typically more than 14,000 MW, forcing the use of unpopular rationing. Only those with access to their own generators and fuel have been able to refrigerate foodstuffs or air-condition their homes around the clock. Oppressive summer heat has triggered protests in several cities across the country, including in Basra. Prime Minister Maliki has warned that two more years of shortages lie ahead as there is no quick fix to the problem, which worsened dramatically in the wake of the US-led liberation in 2003. (BI-ME 30.07)
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5.6 Study Finds GCC's Construction Pipeline Worth $1.368 Trillion
In a study published by the Dubai Chamber of Commerce and Industry on 20 July, they believe that the UAE still accounts for more than half of all GCC construction projects. This despite the fact that the industry ground to a halt amid the global economic downturn. Accordingly, some $714.9b of construction and infrastructure projects were still active in the UAE. The figures, which are based on data from various government agencies, said the total GCC development pipeline totaled $1.368 trillion. Saudi Arabia has $283.8b of projects active, according to the data, while Kuwait is the third biggest market in the GCC with $184.8b of projects. Qatar ($92.6b), Oman ($48.3b) and Bahrain ($44.1b) completed the GCC active projects list. An analysis of the largest construction and infrastructure projects by value in the GCC shows that five of the region's 10 biggest schemes planned or underway are in Abu Dhabi. The report said that the UAE construction industry had suffered a "challenging period" in 2009, adding that this would continue this year. The study added that since the end of the UAE construction boom in 2008, many building projects that were cancelled and put on hold while there had been "little in the way of new project awards". Dubai Chamber also said that the market had shifted from Dubai to Abu Dhabi where short term growth would be driven by the UAE government's spend on infrastructural projects. (DCC 20.07)
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5.7 IMF Urges Kuwait to Reduce Its Government's Current Spending
The IMF has urged Kuwait to reduce its current spending in its annual Article IV Consultation concluded this month. The IMF advises Kuwait to cut down on its current expenditure and rather focus on increasing its capital expenditure. According to the IMF, the economy is estimated to have contracted by almost 4.5% in 2009, the weakest in the GCC region. The drop was mainly caused by the decline in oil prices and weakening financial and construction sectors. The IMF stresses that the outlook for the country depends mainly on its government spending. Given the fall in government revenues as a result of low oil prices, it is not guaranteed that Kuwait will be able to meet its commitments and follow through with its four-year development plan, unless it cuts down on its current spending in terms of subsidies, wage increases and other non-productive spending. This would help increase Kuwait's fiscal space to focus on productive spending that will give a much needed boost to economic growth. (Beltone 25.07)
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5.8 Qatar's Annual Headline Inflation Registers -2.8% In June
Annual headline inflation registered -2.8% in June 2010, up from -3.6% in May 2010, due to a slight increase in the annual change of rents and fuel to -14.5% in June from -16% in May 2010, showed data published by the Qatar Statistics Authority. On the other hand, food and tobacco rose 2.6% and transportation by 2.9% annually in June 2010. On a monthly basis, the change in CPI increased by 0.1% in June 2010, up from a monthly decrease of 0.1% in May. Food prices fell by 0.4%, while rents and fuel costs declined by 0.5% compared to 1.3% decline in May. Food, rents and fuel and transportation constitute 13%, 32% and 20% respectively of the Consumer Price Index (CPI). Annual inflation averaged -0.1% in 1H2010. Pundits expect inflation to rise gradually in 2010, possibly averaging 3%, up from -4.9% registered in 2009, and a peak of 15.2% in 2008, as economic growth rises and prices slowly rebound from their 2009 levels. (Beltone 27.07)
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5.9 FDI Inflows Into the UAE Fall 71% y-o-y in 2009
Annual growth in FDI inflows into the UAE fell 71% in 2009 to $4 billion from $13.7 billion in 2008, data in the UNCTAD 2010 Global Investment Report showed. The UAE was the hardest hit in the GCC region in terms of FDI inflows. Overall annual growth in FDI inflows into West Asia (which includes GCC and some other Arab Countries) fell by around 24% to $64 billion in 2009. Meanwhile, the UAE also saw a decline in annual growth of outgoing FDI of 81% to $3 billion in 2009. The report projects a recovery in FDI flows in 2010 and over the medium term into the West Asia region, provided that new developments in the global economic situation do not affect the revival of investors' access to international credit markets. While Beltone expects to see a general recovery in the levels of FDI flowing into the GCC region in 2010, they believe the UAE will lag behind its GCC peers in terms of FDI inflows' appeal. Investor sentiment will continue to be weighed down by the concerns over the Dubai Inc. debt problems, and until a final equitable restructuring plan that is satisfactory to creditors is reached, any recovery in overall UAE investor sentiment levels will be muted. FDI inflows to the UAE will be geared primarily towards Abu Dhabi sponsored projects, particularly in the hydrocarbon sector. (Beltone 25.07)
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5.10 School Fees Drive Dubai's Inflation Rate in First Half
On 26 July, Dubai's Statistics Centre announced that its inflation rate rose to 0.64% in the first half of the year, compared to the same period of 2009. The emirate recorded a change in its annual June inflation of 0.51% against 0.48% in May. The Consumer Price Index, or CPI, of the emirate reached 115.36 points by the end of last month, compared to 114.63 in the first half of 2009. Education, which has a 4.09% weight on the CPI, fuelled the inflation, recording the highest increase of 12.2% on higher school fees, according to the data. The heavyweight of the index - housing, water, electricity, gas and other fuels - fell by 0.51%. Citing the reason for the decline in this section, the centre said it was driven by a fall in the prices of materials for the maintenance and repair of homes. Prices of wireless and wired services fell by 10.89% while wireless and wired equipment prices increased by 6.31%, the centre added. (Various 26.07)
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5.11 Saudi Hands Out $16 billion In Construction Deals In 2010's First Half
The Saudi Ministry of Finance claimed to have handed out $16 billion in construction contracts over the past six months as the top oil exporter continues an infrastructure plan. In 2009, the Saudi government launched a 5-year pending plan averaging $80 billion per year to develop mostly infrastructure and oil facilities, as well as to counter the repercussions of the global crisis on its little-diversified economy. Saudi Arabia issued total contracts worth SR71.5 billion in the December 18-June 12 period. Of the construction contracts, SR10.5 billion was spent on roads and telecommunications and the same amount on education facilities, while about SR6 billion went to water and sewage projects and SR5.6 billion to village and town developments, SPA said. (Various 22.07)
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5.12 Saudi Arabia Still the Largest Recipient of FDI in West Asia in 2009
Saudi Arabia remained West Asia's largest recipient of FDI in 2009, with total inflows reaching $36 billion, recording a relatively minor drop of 7%, according to the 2010 UNCTAD World Investment Report released on 22 July. The report ranks Saudi Arabia as one of the top 20 host economies of FDI in 2008 and 2009, where it ranked 8th position in 2009. Saudi Arabia's FDI outflows increased significantly in 2009 from $1.5 billion to $6.5 billion as investment opportunities arose to acquire foreign assets. The positive performance in FDI inflows witnessed by Saudi Arabia is largely due to its large hydrocarbon sector, which continues to see large FDI inflows, but which is also increasingly seeing non-hydrocarbon FDI. Investment opportunities are also due to Saudi Arabia's $400 billion stimulus package launched in 2009, which was one of the G20's largest stimulus packages targeting infrastructure spending mainly. A much improved investment climate over the past four years has played a significant role in maintaining and attracting investment to Saudi Arabia which ranks 13th in the ease of doing business index, according to the World Bank Group and has moved up from 67th position in only four years. Owing to the government's economic diversification plans, improvement in human capital, and its commitment to facilitate further the entrance of foreign investment, Saudi Arabia is set to continue to receive strong FDI inflows. (Beltone 25.07)
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5.13 Egypt's Real GDP Growth Accelerates to 5.9% in Q4 2009/2010
Egypt's real GDP growth accelerated to 5.9% y-o-y in Q42009/2010, up from 5.3% in Q3 2009/2010, according to a 28 July cabinet announcement. During the fourth quarter of FY2009/2010 the construction sector grew 13.2% y-o-y and the IT sector grew 12% y-o-y. Government officials have forecast that real GDP growth could accelerate further in FY2010/11 to 5.8-to-6%. The Q42009/2010 real GDP growth outcome is higher than forecast, but brings overall real GDP growth during FY2009/2010 to 5.3% from 4.7% in 2008/2009, which is in line with previously announced government estimates. The overall performance of the Egyptian economy has fared much better than expectations during the previous fiscal year, FY2009/2010, by virtue of robust sectoral activities, particularly real estate and construction, as well as the gradual external recovery which reflected in higher tourism activities and an improvement in Suez Canal revenues and traffic. Furthermore, and until more detailed data on Q4 2009/2010 GDP growth is released, we expect that higher growth levels in the manufacturing sector and some other services activities could have also contributed to this acceleration in real GDP growth. (Beltone 29.07)
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5.14 Egypt Deficit in First Half is 8.3% of GDP
Egypt's budget deficit in the fiscal year to June 30 was 8.3% of gross domestic product (GDP), less than the 8.4% projected last year. Revenue fell to about LE 269 billion ($47 billion) in 2009/10 from LE 282.5 billion in 2008/09, while expenditure increased to LE 367 billion from LE 351.5 billion, Finance Minister Boutros-Ghali announced. Egypt's economy, which withstood the worst of the global economic crisis that began in mid-2008, was buoyed last year by resurgent tourism and Suez Canal receipts, along with resilient construction and gas exports. Government revenue for 2009/10 was higher than the LE 267.8 billion the government had projected when it drew up the budget, while expenditure was at the same level, Boutros-Ghali said. Government debt fell by 0.6% in the year until end-June to 80.5% of GDP. The economy grew by as much as 5.3% in the year, he added. In 2008/09, GDP grew by 4.7%, down from about 7% over each of the previous three years. The Finance Ministry aims to keep the deficit within 7.9% of GDP this fiscal year and between 3.0 and 3.5% in 2014/15, MENA quoted him as saying. The deficit in 2008/09 was 6.9% of GDP. The government approved two stimulus packages worth a total LE 18 billion in 2009/10 designed to spur growth during the global economic slowdown. The ministry also plans to reduce Egypt's total debt to less than 80% of GDP by 30 June 2011 and to 60% by 30 June 2014, Boutros-Ghali said. Tax revenue in fiscal 2009/10 reached LE 148 billion ($26 billion), 12 billion more than budgeted, he said. (Various 21.07)
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5.15 Egypt Signs Free-Trade Deal With Mercosur Bloc
Mercosur, a South American trade bloc that groups big agricultural exporters Brazil and Argentina, signed a free-trade deal with Egypt on 2 August, the Egyptian Ministry of Trade and Industry announced. The agreement is expected to double the volume of trade between Egypt and the Mercosur countries. The agreement will allow preferential treatment for Egyptian products entering the markets of Latin America and will reduce the cost of Egyptian imports for key items including sugar, meat and soy oil. On the other hand, the agreement opens up a market of 76 million consumers to the trade bloc, which also includes Argentina, Brazil, Uruguay, Paraguay, Chile, Bolivia, Ecuador, Colombia and Peru. Mercosur's member states also export cars and auto parts. The trade bloc is also negotiating trade pacts with Jordan, Morocco and the Gulf Cooperation Council (GCC). The deal with Egypt took six years to conclude. Egypt is the world's biggest importer of wheat and Argentina is among the leading global exporters of the grain, although it did not export wheat to the North African country last year, according to official data. Egypt is a significant buyer of Argentine corn and soy products. Egypt's exports to Brazil, the largest economy in Latin America, totaled $87.7 million in 2009, while its imports came to $1.53 billion, the Egyptian Trade Ministry reported. (DNE 03.08)
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5.16 UN Says Egypt Ranks Second FDI Recipient in Africa
The United Nations Conference on Trade and Development (UNCTD) announced that Egypt ranked as the second largest recipient of foreign direct investment (FDI) among African nations in 2009, following first place Angola. Egypt received a total of $7 billion in FDI inflows, while Angola's came in at $13 billion. Foreign direct investments (FDI) to Africa declined by 19%, from $72 billion to $59 billion in 2009, due to the global economic recession, according to the "United Nations World Investment Report 2010: Investing in a low-carbon economy." Developed countries suffered far worse due to the global economic slowdown, with 2009 FDI inflows sinking by 44%, and transition countries — South-East Europe and the CIS — declining by 43%. The report concluded that developing and transition economies such as Egypt are "leading" the way in global FDI recovery. To be sure, these same economies attracted 50% of global FDI in 2009 - the first time this has ever occurred, with $548 billion as well as invested 25% of global FDI outflows, with $280 billion. The report also examined future prospects for global FDI flows, with expectations that FDI flows will reach $1.2 trillion in 2010, $1.3-$1.5 trillion in 2011 and $1.6-$2 trillion in 2012. Focusing on Africa, including Egypt, FDI inflows are expected to grow, which will be the result of both a general global recovery and the strong economic performance of Asian countries, especially given that they are major direct investors. (DNE 25.07)
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6: TURKISH, CYPRIOT, GREEK & BULGARIAN DEVELOPMENTS
6.1 Turkish Inflation Rate Falls In July For Third Month
Turkey's inflation rate declined for a third month in July, confirming central bank forecasts of a slowdown that bolsters the case for keeping interest rates at a record low. The annual consumer inflation rate fell to 7.6% from 8.4% the month before, the Turkish Statistical Institute (TurkStat) announced on 3 August. Central bank Gov. Yilmaz has kept the benchmark interest rate unchanged at 7% since November even as the economy returns to growth after the global financial crisis. Yilmaz last week forecast a "significant" drop in inflation in July and said the slowdown means the bank is unlikely to increase interest rates until 2011. The central bank's preferred measure of core inflation, which excludes energy and food prices, slowed to 4.5% in July from 5% a month earlier, TurkStat said. Turkey's economic growth slowed to 0.1% on a quarterly basis in the first three months of this year, from 1.7% in the previous quarter. The cost of goods leaving Turkish factories and mines rose 8.2% in the 12 months through July, compared with 7.6% a month earlier, the agency said. Producer prices fell 0.2% in the month. (Hurriyet 03.08)
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6.2 Turkey's June Trade Deficit Widens To 22-Month High
Turkey's trade deficit widened in June to a 22-month high as demand for goods and materials to fuel the country's surging growth led to a jump in imports. The $5.6 billion deficit compared with $4.2 billion a year earlier, the Ankara-based Turkish Statistical Institute said on 30 July. Although investment is lagging, imports of intermediate and consumption goods continue to increase. Imports rose 22% to $15.2 billion, outpacing a 15% increase in exports to $9.6 billion. Turkey's GDP increased an annual 11.7% in the first quarter, the fastest pace among the Group of 20 major economies excluding China. (Bloomberg 30.07)
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6.3 Iran & Turkey Sign $1.3 Billion Gas Pipeline Deal
Iran and Turkey signed a €1 billion ($1.29 billion) contract to build a pipeline that will transfer the Islamic state's natural gas to Turkey, the Iranian Oil Ministry announced 23 July. The Pipeline is estimated to be 660 km in length. There are also talks on exporting Iran's natural gas to Europe via Turkey and other energy-related issues. (BI-ME 24.07)
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6.4 Turkey Yet To Harness Huge Solar Energy Potential
Turkey's demand for electricity is increasing steadily and Turkish policymakers are eager to decrease the country's dependence on foreign nations for the gas and oil that, among other things, fuel Turkish electricity power plants. But Turkey has yet to harness its renewable energy potential due to a lack of legislation on the issue. Only 17% of the 198 billion kilowatt-hours (kWh) of electrical energy generated in Turkey in 2008 came from renewable energy sources. As for its ability to make use of its solar energy potential, the country's total established solar energy power is less than 1 megawatt (MW).
Ankara characterizes the Renewable Energy Law (YEK), prepared by the parliamentary Energy Commission, as revolutionary, asserting that YEK will transform Turkey into a base for energy investment. The most important innovation brought about by the new YEK proposal is that the areas of investment in energy have been identified one by one rather than being lumped together, as was the case in the past. Turkey currently obtains more than half of all its electricity needs from natural gas plants. With investment in renewable energy arenas, the variety of supply options would be secured. The most recent New Energy Strategy Document states the goal of having five different sources to supply the 100,000 MW of electrical energy Turkey is predicted to need by 2023. The goal of the country is 20,000 MW in renewable energy sources in Turkey. So Turkey is aiming to reduce its dependence on natural gas and outside sources to a minimum. However, the bill, which was expected to be on Parliament's agenda this summer, was delayed again, which many fear may lead to Turkey missing the renewable energy train. (Zaman 25.07)
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6.5 S&P Confirms Bulgaria's BBB Credit Rating
The Standard and Poor's (S&P) credit agency has confirmed Bulgaria's credit rating as BBB, Bulgarian Finance Minister Djankov announced on 26 July. A BBB rating means adequate capacity to meet financial commitments, but more subject to adverse economic conditions. According to S&P, the cabinet maintains a stable budget macro frame, low budget deficit and low external debt, and there is political consensus to keep these parameters the same, Djankov pointed out. The 2010 budget deficit will be below 4% from the Gross Domestic Product (GDP), ranking Bulgaria among the 5 EU countries with the lowest such deficit, the agency's analysis shows. The external debt is 14.8% of the GDP – one of the lowest in the EU, just second after Estonia, which has a 9.9% external debt. Djankov further explained that 52% from Bulgaria's GDP is for export, making the country's economy open, adding that in neighboring Romania this indicator stands at 25% and in Greece at 20%. S&P confirms Bulgaria's cabinet proposition that small economies can counter the crisis through export. The external trade deficit of Bulgaria is down from 24% from GDP just before the crisis to 9.6% in 2009, while in 2010 it can reach 2%, according to S&P.
The Minister further cited the agency concluding the cabinet of the ruling center-right Citizens for European Development of Bulgaria (GERB) party is applying a program to improve conditions for conducting business in the country, improve the absorption of EU funds, and reduce the effects of the crisis. (SMN 27.07)
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6.6 Bulgarian Cabinet Approves 2011 Draft Budget Framework
On 27 July, Bulgaria's 2011 draft budget framework, prepared by the Finance Ministry, was approved by the Council of Ministers. The document now must be coordinated with the Ministries and the Agencies and then submitted with the Parliament. Finance Minister Djankov made the commitment to achieve it by mid-September. In budget 2011, financing is going up the most in the social assistance, defense and health care sectors, according to the draft. The cabinet plans to collect in 2011 BGN 25.8 B in revenues, which is BGN 1.3 B more than the 2010 updated budget. In the expenditure side of the balance sheet there is a planned reduction of BGN 12 M – down to BGN 27.9 B. If executed, this will lead to a lower budget deficit for 2011 – BGN 1.9 B compared to BGN 3.3 B in 2010. In the approved budget, spending by the Ministry of Labor & Social Policy is up by 19% to BGN 951 M, the Defense Ministry is up by 11% to BGN 990 M and the Health Ministry is up 5% to BGN 570 M. The plan is to increase the expenditures of the National Health Insurance Fund (NZOK) by 4% to BGN 2 B. The cabinet further approved the budget forecast for 2011-2013 and the draft of the State budget share for the Bulgarian National TV and Radio, the Bulgarian Academy of Sciences, the State colleges and the universities, including military ones. Taxes, salaries and wages would not be increased of lowered in 2011-2013, while retirement pensions would be maintained at current levels until 2012 and will be revised in 2013. (SMN 28.07)
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6.7 Bulgaria's Trade Deficit Halves in 2009
Bulgaria had a trade deficit of BGN 10.1 B in 2009, according to final data by the National Statistical Institute on 30 July. Thus, the country's trade deficit in 2009 was half of what it was in 2008 when it reached almost BGN 20 B. After subtracting the expenditures for transport and insurance of imported goods, Bulgaria's 2009 trade deficit drops to BGN 8.5 B. In 2009, Bulgaria exported goods and services worth BGN 22.9 B, a drop of 23.1% year-on-year. In April 2009, Bulgaria registered the steepest export decline - 39.3% - compared with the same month of 2008. Bulgaria's imports amounted to BGN 33 B in 2009, which is a decrease of 32.7% compared with the 2008 levels. In 2009, Bulgaria's export declined in almost all sectors as a result of the global economic crisis. The exports of fuel and oils dropped by almost 40%. The greatest decline in imports was of machines (39%), materials (40%) and oils (38%). Bulgaria's export to the EU states declined by 16.7% in 2009 year-on-year, and amounted to BGN 14.9 B. Over 75% of that went to Germany, Greece, Italy, Romania, Belgium and France. There is a substantial percentage increase in the Bulgarian exports to Luxembourg and Portugal. Bulgaria's import from the other EU member states dropped by 29% in 2009, amounting to BGN 19.8 B. The greatest drop was registered in the imports from Sweden, Luxembourg and Belgium. Overall, Bulgaria had a negative trade balance with the EU stats of BGN 4.9 B in 2009. Bulgaria's import from non-EU states in 2009 declined by 38% compared with 2008, amounting to BGN 13.2 B. Imports from the USA declined by over 45%. (SMN 3.07)
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7: GENERAL NEWS AND INTEREST
*ISRAEL:
7.1 Israel Goes To the Aid Of Burn Victims In Democratic Republic Of Congo
Following the fuel tanker explosion in the city of Sange in the Democratic Republic of Congo on July 2, in which more than 250 people were killed and almost 200 injured, Israel's Ministry of Foreign Affairs sent aid to the disaster area through Israel's National Agency for International Cooperation (MASHAV). Within 48 hours, the Israeli doctors and nurses were flown to the Congo. A delegation of six doctors from Sheba Medical Center, together with medical equipment, flew to the Democratic Republic of Congo to treat the seriously injured. The doctors, all specialists in plastic surgery and burns, arrived on 12 July and treated people with serious burn injuries in the towns of Sange and Uvira, located in eastern Congo, near the border with Burundi. The team was sent in coordination with the Congolese authorities and with the support of President Kabila and the Congolese ministers of foreign affairs and health. A UN task force in the field (MUNISCO) came to the aid of the humanitarian mission and was instructed to facilitate the reception of the delegation and to ensure their security during their stay. In the meantime, thanks to a US-Israel initiative, the Congo is to have its first burn center in Bukavu, a city of 250,000. Currently being developed, the three partners in the project comprise MASHAV, Moriah Africa and the Los Angeles human rights organization, Jewish World Watch. (MFA 18.07)
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7.2 Greece & Israel to Tighten Ties After PM's Visit
Greece and Israel will undergo "a major upgrade of relations," said Prime Minister Netanyahu's office following a recent meeting between Netanyahu and Greek Prime Minister Papandreou, whose visit to Israel was the first visit by a Greek prime minister in decades. Israel's closer ties with Greece follow a sharp deterioration in ties between Israel and Turkey. Papandreou denied a connection between the two, telling reporters, "I've been thinking of forging closer ties with Israel for about two years." Papandreou met with President Peres, Prime Minister Netanyahu and Foreign Minister Lieberman. The two prime ministers discussed their countries' shared ground. Jerusalem and Athens provided the basis for Western civilization, Netanyahu said, and Israel and Greece are now sources of stability in the Middle East. Papandreou recalled the Holocaust, in which many Greeks were killed. The planned upgrade in ties is expected to include closer cooperation regarding finance and technology. Greece has been experiencing a severe economic crisis in recent months. (IsraelNationalNews25.07)
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*REGIONAL:
7.3 Bulgaria's Population Crisis Worsens Despite Rising Birth Rate
Bulgaria's population growth is not improving despite the rise of its birth rate largely due to migration, according to latest Eurostat data about the population of the EU. Bulgaria was the country with the highest death rate of all 27 EU member states in 2009 - 14.2 per 1000 inhabitants. The average EU 27 death rate in 2009 was 9.7 per 1000 (a total of 4.8 million deaths). Bulgaria is followed by Latvia (13.3%), Hungary (13%) and Lithuania (12.6%), while the lowest death rates were in Ireland (6.6%), Cyprus (6.7%), Luxembourg (7.3%) and Malta (7.8%). Bulgaria's death rate is about the same as it was in 2000 (14.1 per 1000) but has declined compared with 2008, when it reached a peak of 14.5 per 1000. In 2009, 5.4 million children were born in the EU27. The crude birth rate was 10.7 per 1000 inhabitants, slightly down compared with 2008 (10.9%). The highest birth rates were recorded in Ireland (16.8%), the United Kingdom (12.8%), France (12.7%), Cyprus (12.2%) and Sweden (12.0%), and the lowest rates in Germany (7.9%), Austria (9.1%), Portugal (9.4%), Italy (9.5%), Latvia and Hungary (both 9.6%). Bulgaria's birth rate in 2009 was 10.7 per 1000, up from 10.2 in 2008 and 9.0 in 2000. According to Eurostat, on January 1, 2010, Bulgaria had a population of 7.564 million, down from 7.607 million a year earlier. Bulgaria's population declined by only -4.4 per 1000 in 2008, and -5.1 per 1000 in 2000. Eurostat data shows improvement of Bulgaria's natural population growth – it was -5.1 per 1000 in 2000, -4.3 per 1000 in 2008 and -3.6 per 1000 in 2009. The net migration outflow rate, however, is said to be worsening – from 0.0 per 1000 in 2000, to -0.1 per 1000 in 2008, and -2.1 in 2009. (SMN 28.07)
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8: ISRAEL LIFE SCIENCE NEWS
8.1 Can-Fite's CF102 Decreased Viral Load of HCV in 3 Patients with Liver Cancer
Can-Fite BioPharma reported that a significant decrease in HCV viral load was detected in 3 patients with liver cancer who are treated daily orally with CF102. The company is studying CF102 as a treatment for liver cancer (hepatocellular carcinoma, or HCC). The results announced today relate to data which came out of a Phase 1/2 clinical trial of CF102 in the treatment of patients with advanced HCC. This protocol is enrolling patients with advanced or treatment-refractory hepatocellular carcinoma (HCC), or liver cancer. Because one of the most important risk factors for HCC is chronic viral hepatitis, patients in this trial are tested at entry for infection with hepatitis C virus (HCV). Although not part of the primary trial objectives, those patients who are HCV-positive are retested periodically to gauge the effect of CF102 on HCV infection in this population. Till now 4 patients with HCC are also HCV-positive with a circulating viral load of >106 IU/mL at entry and in 3 out of the 4 patients, the viral load significantly decreased in the absence of any other intervention, strongly indicating an effect of CF102 in suppressing viral replication in the liver.
Petah Tikva's Can-Fite Biopharma (http://www.canfite.com) is a public company traded on the Tel Aviv Stock Exchange. The Company focuses on the development of molecule-based drugs that bind to receptors on and inhibit the development of cancer or inflammatory cells. Can-Fite's development pipeline currently has two drugs, CF101 and CF102. The company is simultaneously conducting clinical trials with the two drugs for various indications. CF101 is being studied for the treatment of inflammatory and ophthalmic diseases and CF102 is studied for the treatment of Liver Diseases. (Can-Fite 26.07)
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8.2 Zetiq Reports CE Conformity for Its Cervical Cancer Diagnostic Kit
Zetiq Technologies, a subsidiary of Bio-Light, reports that it has fulfilled the essential requirements towards issuing a self declaration CE mark of conformity for its diagnostic product for identification of cervical cancer in cytological specimens. The requirements fulfilled by the company comply with Council Directive 98/79/EEC for in vitro diagnostic medical devices. As part of these requirements, the Zetiq laboratory has recently received an ISO 13485: 2003 certificate for developing and manufacturing medical products. The product for which the company issued the CE mark of conformity is positioned at this stage as an adjunct diagnostic test towards identifying cervical cancer in cytological specimens obtained from females undergoing cervical smear examinations by the standard methods. The self declaration CE mark of conformity will enable the company to initiate production and marketing of this product in Europe, engage in collaborations with leading companies and laboratories, and perform large scale clinical trials.
Ramat Gan's Zetiq Technologies (http://www.zetiq.co.il) develops effective cancer diagnostic tools. A significant medical need exists for early stage diagnostic tools for screening, monitoring or diagnosing cancer. Zetiq offers unique advantages in this market with its proprietary CellDetect technology for differential staining and morphological visualization to differentiate between non cancer cells and a wide variety of cancer indications. The Company's products alleviate the process of locating and identifying suspected cancer cells, reduce error, simplify the process and have a potential to be fully automated. Zetiq is a subsidiary of Bio-Light Life Science Investments, a management and holding company specializing in biomedical technologies. (Zetiq 27.07)
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8.3 New Invention at Weizmann Institute Enables Severely Disabled To Communicate By Sniffing
A unique device based on sniffing - inhaling and exhaling through the nose - might enable numerous disabled people to navigate wheelchairs or communicate with their loved ones. Developed in the Weizmann Institute's Neurobiology Department, the new system identifies changes in air pressure inside the nostrils and translates these into electrical signals. The device was tested on healthy volunteers as well as quadriplegics, and the results showed that the method is easily mastered. Users were able to navigate a wheelchair around a complex path or play a computer game with nearly the speed and accuracy of a mouse or joystick. Yeda Research and Development Company, Ltd., - the technology transfer arm of the Weizmann Institute - is investigating the possibilities for developing and distributing the technology.
Sniffing is a precise motor skill that is controlled, in part, by the soft palate - the flexible divider that moves to direct air in or out through the mouth or nose. The soft palate is controlled by several nerves that connect to it directly through the braincase. This close link led the scientific team to theorize that the ability to sniff - that is, to control soft palate movement - might be preserved even in the most acute cases of paralysis. Functional magnetic resonance imaging (fMRI) lent support to the idea, showing that a number of brain areas contribute to soft palate control. This imaging revealed a significant overlap between soft palate control and the language areas of the brain, hinting to the scientists that the use of sniffing to communicate might be learned intuitively. (IsraelNN 27.07)
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8.4 InsuLine Raises NIS 21.5 Million in Tel Aviv IPO
On 28 July, InsuLine Medical raised NIS 21.5 million in the public tender of its IPO on the Tel Aviv Stock Exchange (TASE). InsuLine's InsuPad shortens the time for insulin to be absorbed into the bloodstream. The company believes that it will obtain US FDA approval for the product within 12 months, under an abbreviated procedure. The company already has EU CE Mark for the product and its development and production processes. Petah Tikva's InsuLine's (http://www.insuline-medical.com) seeks to develop and market technologies to improve the clinical effectiveness of devices and drugs, for type I and type II diabetics. To date, the company has conducted a series of over 100 human clinical studies to demonstrate the safety and effectiveness of the first generation InsuPatch device. The product has already received a CE mark for marketing in the EU and the company is now seeking FDA approval for it. InsuLine has filed several patents that protect the technology and related devices and methods. (InsuLine 29.07)
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9: ISRAEL PRODUCT & TECHNOLOGY NEWS
9.1 FiberHome Selects Celeno to Support Shanghai Telecom with Wireless HD IPTV
Celeno Communications announced that FiberHome Telecommunication Technologies Co. has selected Celeno's CL1800 high performance Wi-Fi system-on-a-chip (SoC) to enable its HG500 and HG230 optical network gateways with carrier-grade Wi-Fi for IPTV streaming. FiberHome is a leading telecommunications provider in China. The collaboration between Celeno and FiberHome addresses the expansion of Fiber-to-the-Home (FTTH) network in China, and the growing demand for wireless HD IPTV home networking to support advancements in the digital home towards a full wireless life style. China Telecom launched a massive FTTH network to service triple-play services across the country. Shanghai Telecom, an operating unit of China Telecom, officially launched its program in June 2009, and other provinces are soon to follow. Shanghai Telecom selected FiberHome's The FiberHome optical gateway to target FTTH deployments, providing fast broadband access capability and triple-play services: data, voice and HD IPTV. By leveraging Celeno's Wi-Fi chipset, the FiberHome optical gateway distributes IPTV wirelessly, providing cost-effective home network self-installation without the trouble of house wiring, enabling the flexibility to watch video content anywhere around the house.
Ra'anana's Celeno (http://www.celeno.com) is a leading provider of high performance Wi-Fi chips for HD multimedia and entertainment home networking applications. Powered by Celeno's system-on-chip (SoC) and its OptimizAIR technology, home gateways, multi-room DVRs and media servers can distributed multiple and simultaneous HD video streams to standard set-top boxes, PCs, television sets and other WiFi enabled consumer devices. Founded in 2005, the company has offices and representatives in EMEA, the U.S. and Asia-Pacific, and is backed by blue chip investors including Cisco Systems, Greylock Partners and Pitango Venture Capital. (Celeno 27.07)
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9.2 Camtek Receives Order for Multiple Wafer Inspection Systems
Camtek received follow-on orders for three wafer inspection systems from a major IDM (Integrated Device Maker) and chipmaker. The three systems will be installed during the third quarter of 2010. The orders, totaling above $2 million dollars, include three systems for 3D metrology and inspection of bumped wafers. Migdal Ha'Emek's Camtek (http://www.camtek.co.il) provides automated solutions dedicated for enhancing production processes and yield, enabling our customers new technologies in two industries; Semiconductors, Printed Circuit Board (PCB) & IC Substrates. Camtek addresses the specific needs of these industries with dedicated solutions based on a wide and advanced platform of technologies including intelligent imaging, image processing, ion milling and digital material deposition. Camtek's solutions range from micro-to-nano by applying its technologies to the industry-specific requirements. (Camtek 22.07)
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9.3 Ashdod Port Integrates SAP & ORACLE Using Magic Software's iBOLT Business Integration Suite
Magic Software Enterprises announced a new contract with the Israeli Ashdod port, for the supply of Magic Software's iBOLT business integration suite. Using the iBOLT integration suite, Ashdod port will manage several procedures including the container release process and the integration of employee data within the SAP ERP and ORACLE database. Releasing containers is typically a complex process which requires interfacing with different data systems and platforms. Using iBOLT, the Ashdod port will be able to manage the entire process faster, and with a significant reduction in human errors. iBOLT will also be used to automatically synchronize the port's employee data which is stored on both the SAP ERP and ORACLE database and which, until now, had to be manually updated every time a change was made to either system. Through integration, iBOLT helps companies get more value from their IT investments by automating manual and repetitive workflows and freeing sales teams to focus on selling. With an integrated view of company data, management and employees can make more informed business decisions, get more value from each business interaction and achieve faster time to market for their products and services.
Or Yehuda's Magic Software Enterprises (http://www.magicsoftware.com) is a global provider of on-premise and cloud-enabled application platform solutions - including full client, rich internet applications (RIA), mobile or Software-as-a-Service (SaaS) modes - and business and process integration solutions. The company's award-winning, code-free solutions give partners and customers the power to leverage existing IT resources, enhance business agility and focus on core business priorities. Magic Software's technological approach, product roadmap and corporate strategy are recognized by leading industry analysts. (Magic Software 21.07)
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9.4 TowerJazz's CMOS Sensor Process Powers Cypress' New Global Shutter Image Sensor
TowerJazz and Cypress Semiconductor Corp. (San Jose, California) announced that TowerJazz's 0.18-micron CMOS image sensor (CIS) process is being used to power Cypress' new 25-megapixel industrial high-sensitivity, high-speed CMOS image sensor targeted for the high-end machine vision market. The VITA 25K sensor, sampling now, provides the market's highest throughput for a device with a unique pipelined and triggered global shutter architecture. The VITA 25K sensor has 32 10-bit digital Low Voltage Differential Signaling (LVDS) outputs that enable transfer of image data over a standard industry protocol at low power and low noise. Each channel runs at a 620 Mbps, which results in a high frame rate of 53 frames-per-second (fps) at full resolution for undistorted images and fast readout. Manufactured using TowerJazz's CIS process, the sensor is ideal for high-end machine vision applications, such as inspection machines; biometric inspection, such as next-generation palm print readers; and intelligent traffic systems.
Migdal Ha'Emek's Tower Semiconductor (http://www.towerjazz.com), the global specialty foundry leader and its fully owned U.S. subsidiary Jazz Semiconductor, operate collectively under the brand name TowerJazz, manufacturing integrated circuits with geometries ranging from 1.0 to 0.13-micron. TowerJazz provides industry leading design enablement tools to allow complex designs to be achieved quickly and more accurately and offers a broad range of customizable process technologies including SiGe, BiCMOS, Mixed-Signal and RFCMOS, CMOS Image Sensor, Power Management (BCD), and Non-Volatile Memory (NVM) as well as MEMS capabilities. (Tower 27.07)
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9.5 Altair Semiconductor Unveils TD-LTE Reference Design for Wireless Terminal Manufacturers
Altair Semiconductor announced the commercial availability of a new TD-LTE terminal reference design for use in a range of products, including USB dongles, data cards, CPEs and handheld devices. The reference design features Altair's field proven FourGee-3100/6200 chipset and a complete and interoperability-tested LTE software stack. Spectrum bands supported include India's recently auctioned TD-LTE band 40, China's band 38 and a variety of other bands which are being trialed and deployed in Japan, North America and Europe. The reference design features a unified TDD/FDD architecture using a single chipset and a single software stack, enabling a small form factor and cost efficient integration for multimode devices. TD-LTE, a 4G wireless standard which was designed to operate in unpaired spectrum, is emerging as the de-facto 4G standard for TDD spectrum globally. Since China Mobile's selection of TD-LTE as its 4G upgrade path, TD-LTE has received strong support from carriers such as Reliance Industries (RIL), Softbank Mobile and others in Europe and North America as well as from carriers such as Yota, which recently announced a strategic shift from WiMAX to LTE.
Hod Hasharon's Altair Semiconductor (http://www.altair-semi.com) is the world's leading developer of ultra-low power, small footprint and high performance 4G semiconductors. The company's products provide device manufacturers integrating any 4G technology into their products with a highly power-optimized, robust and cost-effective solution. Altair's comprehensive product portfolio includes baseband processors, multi-band RF transceivers for both FDD and TDD bands, and a range of reference hardware and product level protocol stack software. (Altair 27.07)
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9.6 Ness Signs $12 Million Dispatching System for Distribution Network Management at CEZ
Ness Technologies announced the signing of a contract with CEZ Distribution to deliver a dispatching system for its distribution network management, in a deal worth CZK 250 million, or approximately $12.2 million. Ness won the contract in a public tender published by CEZ Distribution, the largest power distribution company in the Czech Republic. The new, single, common distribution network management system will replace five different existing dispatching systems, so that, if necessary, management of one region can be taken over by another. Besides paving the way for the new Smart Grid projects, the new system will be capable of optimizing distribution network management, ensuring a greater degree of security and offering opportunities for inter-regional cooperation in case of outage or disaster. Over the next three years, a large team of experts from Ness will work on the project. Under the contract, Ness will provide the new distribution management system, the migration and integration of data, the creation of interfaces to other systems run by CEZ Distribution and the needed hardware and software infrastructure. Another key element is the delivery of a full-system simulator for dispatchers. The project will be followed by a service support agreement and, once the distribution management system is implemented in approximately 3 years, additional projects which extend the scope of the current contract are expected to be started, including a System Optimization and User-Friendly Maximization project.
Tel Aviv's Ness Technologies (http://www.ness.com) is a global provider of IT and business services and solutions with specialized expertise in software product engineering; and system integration, application development, consulting and software distribution. Ness delivers its portfolio of solutions and services using a global delivery model combining offshore, near-shore and local teams. (Ness28.07)
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9.7 BroadLight Launches 3rd Generation 40nm GPON Fiber Access Processor Family
BroadLight released its 3rd Generation GPON Processor family. The BL23500 3rd Generation GPON Processor family is the first 40nm set of devices designed for the fiber access mass market, and feature the most cost effective implementation, lowest power consumption and the lowest cost of manufacturing of any chip in its class. The BL23500 features a powerful MIPS controller, the RunnerGrid Network Processor and a VoIP DSP creating a fiber grade, innovative architecture that best meets both the GPON CPE platforms requirements and the emerging GPON residential gateway market requirements. The device utilizes Energy Efficient Ethernet (EEE) and offers advanced power saving modes specifically designed for optimal performance at minimal energy costs demanded by leading worldwide operators. BroadLight's consolidated software platform enables a single comprehensive software development environment for rapid development of SFU/Gateway/MDU solutions. These solutions include OMCI and TR-69 interworking with the 3rd Generation GPON Processor family, coupled with the highest level of OLT interoperability in the industry it thereby offers the lowest cost of ownership. The BL23500 family will be available for customers in Q4/10. Ramat Gan's BroadLight (http://www.broadlight.com) is a fabless semiconductor company supplying processors to equipment vendors for fiber access applications around the globe. BroadLight enables service delivery with its highly integrated processors and software for central office and customer premise equipment. A worldwide leader in fiber access semiconductor and software, BroadLight powers all the GPON deployments worldwide. (BroadLight 02.08)
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9.8 Mellanox InfiniBand Provides the Networking Foundation for the University of Cambridge's HPC Cloud
Mellanox Technologies announced that its industry-leading end-to-end 40Gb/s InfiniBand connectivity products, including ConnectX-2 adapter cards, BridgeX gateway system, 40Gb/s InfiniBand switches and cables, provide the high-performance server and storage networking for the new Dell | Cambridge High-Performance Computing Solution Centre. On the University campus, the HPC cluster provides on-demand access to support over 400 internal users spread across 70 research groups ranging from traditional sciences such as chemistry, physics and biology, to rapidly growing areas for HPC-based research such as bio-medicine, clinical-medicine and social sciences. Mellanox's end-to-end InfiniBand connectivity, consisting of the ConnectX-2 line of I/O adapter products, gateways, cables and comprehensive IS5000 family of fixed and modular switches, delivers industry-leading bandwidth, efficiency and economics for the best return-on-investment for performance interconnects. Mellanox provides its worldwide customers with the broadest, most advanced and highest performing end-to-end networking solutions for the world's most compute-demanding applications.
Yokneam's Mellanox Technologies (http://www.mellanox.com) is a leading supplier of end-to end connectivity solutions for servers and storage that optimize data center performance. Mellanox products deliver market-leading bandwidth, performance, scalability, power conservation and cost-effectiveness while converging multiple legacy network technologies into one future-proof solution. For the best in performance and scalability, Mellanox connectivity solutions are a preferred choice for Fortune 500 data centers and the world's most powerful supercomputers. (Mellanox 02.08)
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9.9 BOE Signs Major, Multi-Million Dollar Agreement for Orbotech Systems
Orbotech announced that it has been selected as the ‘vendor of choice' by Beijing Oriental Electronics (BOE) Technology Group, with the purchase of multiple Array Tester and Automated Optical Inspection (AOI) systems valued at approximately $50 million dollars to be utilized in BOE's new Gen-8 LCD panel television fabrication facility in Beijing, China. Deliveries to this plant are expected to commence towards the end of 2010. BOE is a China-based company primarily engaged in the research, development, manufacture and sale of thin-film transistor-liquid crystal displays (TFT-LCDs).
Yavne's Orbotech (http://www.orbotech.com) is principally engaged in the design, development, manufacture, marketing and service of yield-enhancing and production solutions for specialized applications in the supply chain of the electronics industry. The Company's products include automated optical inspection (AOI), production and process control systems for printed circuit boards (PCBs) and AOI, test and repair systems for flat panel displays (FPDs). The Company also markets computer-aided manufacturing (CAM) and engineering solutions for PCB production. In addition, through its subsidiary, Orbograph Ltd., the Company develops and markets character recognition solutions to banks and other financial institutions, and has developed a proprietary technology for use, among other things, in web-based, location-independent data entry for check and forms processing; and, through its subsidiaries, Orbotech Medical Denmark A/S and Orbotech Medical Solutions Ltd., is engaged in the research and development, manufacture and sale of specialized products for application in medical nuclear imaging. (Orbotech 02.08)
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9.10 PerSay Introduces Biometric Authentication for iPhone Apps
PerSay announced the availability of its VocalPassword functionality for iPhone, iPad and iPod Touch applications. The new capability is poised to replace cumbersome login and strong authentication processes. iPhone voice authentication, which interfaces with VocalPassword Web service interface, implements an extremely accurate and easy to use process that utilizes a touch-and-record user interface. It can easily be embedded into any iPhone App with minimal resources. The Voice Biometrics functionality uses a simple spoken pass phrase which enables singe / multi-factor voice-based authentication. By combining it with the Device ID, and / or a password, a triple-factor authentication is enabled. PerSay said that by eliminating keyboard use, as well as the need for Auto-Filling names and passwords which poses a security risk, the PerSay state-of-the-art solution provides optimal usability with maximum protection. Sensitive enterprise and personal applications, including mobile banking, social networks, payment services, membership clubs, and many more, can now provide their users with a sleek and innovative, yet strong authentication experience. Ra'anana's PerSay Ltd. (http://www.persay.com) is a leading provider of advanced biometric speaker verification products. PerSay's technology relies on the biometric power of voice to verify a speaker's identity. PerSay's products have been deployed by leading financial services, telecom operators, healthcare providers, enterprises and law enforcement agencies worldwide. (PerSay 03.08)
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10: ISRAEL ECONOMIC STATISTICS
10.1 Israel's July Tax Revenues Reach All-Time High
The government's tax revenues rose to an all-time of NIS 19 billion in July 2010, the largest amount since independence in 1948. July's direct tax revenues rose 14.7%, compared with July 2009, thanks to higher income tax revenues, due to the improvement in the labor market and drop in unemployment, higher company tax revenues and increased land tax revenues. Land tax revenues totaled NIS 811 million in July, 74% more than in July 2009. The increase was mainly due to a 138% increase in betterment taxes. Most of the increase in betterment and purchases taxes was in the Tel Aviv district, where July purchase tax revenues were up 81% over July last year, and betterment tax revenue were up 600%. Two extraordinarily large land deals were responsible for this growth. Tax and fees revenues in January-July exceeded the target by NIS 5.8 billion, as economic growth was higher than the budget projections. The government's deficit was nonetheless NIS 900 million in July and NIS 10.9 billion in January-July. The deficit set out in the budget is NIS 43 billion. The deficit fell from NIS 18.4 billion in the corresponding months of 2009. (Globes 03.08)
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10.2 Yisrael Hayom Becomes Israel's Most Popular Print Newspaper
Three years after its first issue hit the streets, Yisrael Hayom (Israel Today) has surpassed Yediot Aharonot in public exposure, according to a TGI survey. Yediot Aharonot (also known as Yediot for short) has been Israel's most popular newspaper for more than 30 years and was considered unassailable for decades, during which it led over second-place Maariv by a wide margin. Unlike Yediot and Maariv, Yisrael Hayom is a free newspaper, distributed at no charge at train stations and other public places. The poll shows Yisrael Hayom with 35.2% exposure in the first six months of 2010 – a dramatic 30% rise from the preceding six month period. Yediot has 34.9%, up from 33.9% in July-December 2009. Maariv is down to 12.5%, from 13.6% in the previous six month period. Haaretz is also down, to 6.4%. In January-June 2009 it had 7.5%. (IsraelNationalNews29.07)
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11: In Depth
11.1 ISRAEL: Citi Finds Impact of Conflict on Israeli Market Low
On 28 July, Globes (http://www.globes.co.il) reported that in a review focusing on geopolitical risk in the Israeli securities market, Citigroup Global Markets finds that there is little evidence that recurring conflict has had a negative impact on the Israeli economy. Israel's GDP has grown at an annual rate of 5.5% since 1960, compared with global GDP growth of 3.5% and population growth of 2.6%. Israeli equities have returned approximately 20% annually since 1992.
However, analysts Michael Klahr, Andrew Howell and David Lubin note that the past is not always a good guide to the future, and neither are current asset prices. "If Iran really is an existential threat to Israel, that is bad news for the Israeli economy and asset prices regardless of strong underlying fundamentals and economic policy," they write. They also observe that if Iran and Israel did go to war, Israeli holdings would be the least of international investors' worries. "US involvement, oil nearer $200 and increased chances of a global recession could all be of greater concern."
There is some discernible impact of conflict on specific sectors. Tourism, for example, accounts for less than 5% of GDP, far lower than Greece, Spain and Portugal, despite good weather, beaches, and no shortage of sites of historical significance. On the spending side as well, defense spending was 17% of total government spending in 2007, far higher than in other OECD countries. "In the absence of military conflict, this is money that could be put to better economic use, in the form of infrastructure, education and other higher ROI (over the long term) investments. Nevertheless, Israel's overall long-term economic record is undeniably a good one in a global context," the analysts comment.
Even more difficult to discern, according to Citigroup, is the effect, if any, of conflict on Israeli markets. "The TA100 sold off -7% at the start of the Second Lebanon War (July 2006) but had recovered its losses by the time the war ended in late August and closed the year 18% higher than its July low. In September 2000 at the start of the second Palestinian uprising, the TA100 only sold off 2% in the first week of hostilities but within a month was down -19%. It would not recover its 564 level (on the eve of hostilities) for three years, although the global tech collapse together with poor macro policy were arguably more important drivers of GDP and equity market returns over the period," the analysts write.
Overall, Citigroup's approach to the Israeli market is that it presents a compelling long-term investment thesis but that it calls for caution in the near term. "Long-term GDP growth above 3%, credible macro policy and management, reasonable valuations, and a large and growing local institutional investor base are all supportive of equity market outperformance vs. new developed market peers in the coming years. Near term, we are less optimistic with economic growth rates rolling over, gradually rising policy rates, lack of developed market investor interest and high equity weightings for local institutions all obstacles to short-term performance."
Citigroup is also impressed with Israeli banks, saying they should be a good investment over the longer term. The report finds Bank Leumi (TASE: LUMI) to be the pick of the sector. (Globes 28.07)
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11.2 SAUDI ARABIA: What Does "Reform" Mean in Saudi Arabia?
On 27 June, Neil Partrick wrote in the Carnegie Arab Reform Bulletin (http://www.carnegieendowment.org/arb/) that under the ageing King Abdullah, those in the al-Saud family seeking to advance economic, legal, and political (or, perhaps more accurately, administrative) reform seem to be in a race against the clock. The assumption of many inside the Kingdom is that the next two to three years could be decisive. Elite figures sympathetic to reform are concerned that what has been achieved - modest by international standards, significant by Saudi Arabia's - will stall under a King Sultan or a King Naif (the more likely of the two, given health concerns about Crown Prince Sultan). Changes made since Abdullah acceded in 2005 lack an institutional basis and have not captured the imagination of the Saudi public, leading to the impression that they constitute personal whims that can just as easily be taken back or put indefinitely on the back burner.
Reform in Saudi Arabia does not constitute a clearly articulated program intended to reach a defined outcome; rather, what is often referred to as reform is more about changing the environment. A more open environment has certainly emerged in the last few years. Various media outlets controlled by Saudi Arabia's competitive ruling elite publish different commentaries on the local and regional political scene. But this is not a true debate; it is more a public posting of distinct opinions. Among the issues receiving the most attention are the appropriate role of women and the related role of the mutawa'in (religious police), public sector corruption, education reform and the need for Saudi nationals to be better equipped for a more dynamic private sector.
Thus far reform has largely meant putting putative reformers behind key desks in ministries and public bodies. So, in marked contrast to Saudi tradition and to the wider regional trend, the education ministry has become something of a reformist fiefdom, at least as far as the top jobs are concerned, making it an important focus of Abdullah patronage in the intra-Saud power play. Actual reform of educational practice, however, has not progressed beyond some curricula and course book changes, as well as the establishment of a controversial co-educational island of excellence, the King Abdullah University of Science and Technology (KAUST) near Jeddah. KAUST, notably, is not under the authority of the higher education ministry, even though it is envisaged that it will eventually be subjected to formal state control. One area that is likely to get attention, whoever succeeds Abdullah, is technical training. Saudi Arabia cannot bridge the gap between population and economic growth without obliging Saudi nationals to work more, and for less, in the private sector.
Judicial reforms have in practice seen the creation of a new Supreme Court as the highest court of appeal, but this is essentially a name change for what was previously a function of the Supreme Council of the Judiciary (SCJ). The new role envisaged for the SCJ, the training of often ill-informed judges, has yet to begin. Although many of the salaried ‘ulema (clerics) remain the same highly conservative old breed, the SCJ is under new management. Codification of shari'a (Islamic law) - potentially important for a more predictable legal environment for business and those seeking redress for human rights infractions - has been agreed upon. When it will be published in an authorized majalla (gazette) or written compendium of legal judgments designed to constitute legal precedent, is less clear. A previous official majalla dating back to the era of Ibn Saud, who founded the state in 1932, soon fell into disuse.
Getting the Higher Council of ‘Ulema to agree to codification, in principle, has taken several years. With the exception of big ticket items such as the foreign investment law and Qur'an-based punishments for social crimes, anything resembling written law is pretty much uncharted territory in the Kingdom. An eventual new majalla is not expected to redirect Saudi law onto a new, more liberal, footing, but rather to create a more transparent and predictable legal path for Saudis and for foreign businesses. Controversial social issues, such as male guardianship over adult women and the inequities of child marriage, are the subject of extensive media debate but there is no expectation that the promised majalla will change them fundamentally.
Regarding economic reform, the traditional clientelism of what remains an essentially rentier state stands in the way of an entrepreneurial class that could in time be the basis of political change. A patronized Saudi private sector that is not very private and that depends on state/princely patronage is likely to remain a feature of Saudi political economy. Share offerings may be resumed at pre-recession levels, but these are minority stakes mainly for Saudi nationals. Majority ownership is liable to remain in the hands of the powerful few, while much of public industry is likely to see at most only privatization of a minority holding.
Regarding explicitly political reform, there is little progress. King Abdullah has scaled back his ambitions on this front due to fears among the more conservative senior al-Saud that even prospective partly elected and relatively disempowered regional councils would create a dangerous precedent. The second round of elections to the local councils originally scheduled for 2009 have been postponed to 2011. The King's focus is rather on making the public sector more efficient, with corruption in particular being quietly targeted. More significant changes, such as giving the Majlis al-Shura (consultative council, the Kingdom's appointed quasi-parliament) any actual powers, are unlikely for now. There is some attention to the more modest issue of broadening Shura membership to make it represent more of the different strands of Saudi society.
All in all, substantive Saudi reform is largely illusive. While the media commentariat are active, the jury is out on what the practical impact will be. So far, a change in the mood music without an institutional basis for greater progress has had little effect on the attitudes or expectations of Saudi nationals, many of whom are understandably circumspect about the sustainability of current policies after Abdullah. Neil Partrick is a Middle East consultant and an associate fellow at the Royal United Services Institute in London. (CARB 27.07)
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11.3 SAUDI ARABIA: Full Steam Ahead
The Oxford Business group says infrastructure upgrades are the order of the day, with the government of Saudi Arabia giving its full financial backing to big-ticket transport projects in a bid to ensure that passengers and cargo can move about the Kingdom more quickly, efficiently and affordably.
One of the largest projects under way is a significant expansion of railway services. Construction is steadily progressing on a 2400-km cargo link known as the North-South Railway (NSR). Once completed, the NSR will link Al Haditha on the Jordanian border to the capital, Riyadh. A branch off the main line will also reach industrial areas on the Gulf.
The NSR is being developed by the Saudi Railway Company (SAR) in three phases. The first phase is a 1486-km stretch linking the Saudi Arabian Mining Company's (Ma'aden) phosphate mine at Al Jalamid and its bauxite mine at Az Zabirah with processing facilities located at Ras Az Zawr on the Gulf coast. "We have completed 1050 km of railway track out of a total of 1486 km," SAR's Fawaz Al Magati told local media last month. The first phase is expected to be operational by the end of 2010. The second phase of the NSR will focus on general freight traffic in conventional and intermodal service while a 200-km-per-hour high-speed passenger service will be developed in the third phase.
Passenger service is the focus on the Kingdom's western coast with significant progress being made on two projects: the Haramain High-Speed Rail Project (HHR) and the Mashair Metro, also known as the "Mecca metro".
The 450-km HHR, being overseen by the Saudi Railways Organization (SRO), will connect the Holy Cities of Mecca and Medina with additional stops at King Abdullah Economic City, King Abdulaziz International Airport and central Jeddah. It is expected to carry more than 3m passengers annually upon completion.
Earlier this month, the SRO announced it had received two bids for the $1.4bn second stage of the HHR, which includes the contracts to lay the tracks, install signals and perform operations and maintenance. The two bidders who submitted contracts were consortiums led by the Al Rajhi Group and the Al Shoula Group. The winning bidder will be required to operate and maintain the infrastructure for a period of 12 years. "Completing the high-speed train between Mecca and Medina will reduce transportation time between the two Holy Cities, making the situation for pilgrims much easier," Osama Al Bar, the mayor of Mecca, told OBG.
The metro project will also ease transport for pilgrims visiting Mecca. "The 20-km line from Arafat to the Holy Shrine will have a fully operational capacity of 70,000 passengers per hour. This year we hope to start operations with a capacity of around 30,000 passengers per hour," said Al Bar. The Chinese Railways Company is carrying out the construction of the SAR6.7bn ($1.8bn) project along with France's Thales and domestic firms. A test run has been scheduled for August 1, according to the project's director-general. (OBG 23.07)
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11.4 EGYPT: BP Closes Gas Deal
On 20 July, the Economist Intelligence Unit (http://www.eiu.com) said the signing of a$9bn agreement between the Egyptian government and the UK's BP, and its minority partner RWE Dea of Germany, to develop offshore gas fields provides a welcome fillip for the UK firm's embattled chief executive Tony Hayward. However, the deal's main significance for Egypt is that it marks a revival of upstream gas development after several years of wrangling over commercial terms. As a result, concerns about Egypt's ability to satisfy growing domestic demand and honor its gas export commitments will have eased considerably.
The importance of the deal for BP was evident in the fact that Mr. Hayward was in Cairo in person to sign the contract with Sameh Fahmy, the Egyptian petroleum minister, on 19 July. His presence is likely to have reassured the government that this project and BP's other operations in Egypt will not be affected by the billions of dollars of clean-up and compensation payments that the company must make following the Gulf of Mexico oil spill. (The Egyptian assets in the Western Desert that BP has sold to Apache Corporation are marginal to the UK company's core interests in the Gulf of Suez and offshore Nile Delta, although they do fit in well with Apache's operations.)
The agreement provides for the development of five fields in the adjacent offshore North Alexandria and West Mediterranean Deepwater blocks. Most of these fields were discovered between 2002 and 2005. The German partner has a 40% stake in North Alexandria and 20% in West Mediterranean. The fields are estimated to contain 5trn cu ft of natural gas and associated condensate, and BP says that it aims to commence production in late 2014, with output reaching a plateau of up to 1bn cu ft/day (roughly equivalent to 10bn cu meters/year). The bulk of the gas is in the North Alexandria block.
Saved by the bell
BP and RWE have been negotiating with the government for some time about an acceptable commercial framework for developing these fields. The existing terms written into the original concession agreements are based on a production-sharing model, whereby the state-owned Egyptian Natural Gas Holding Company holds a 50% stake in the production venture and is entitled to between 75% and 85% of output after allowing for cost recovery. The government purchases the remaining gas from the operating partners at a price based on a formula relating to crude oil. BP itself negotiated a ceiling of $2.65 per mBTU for this price 10 years ago for its existing gas fields. It has been adjusted upwards for BP and others since then, but a much more substantial increase would have been necessary in order to prompt BP and RWE to commit investment to developing the new fields, owing to the increased costs.
In May it emerged that the two sides had resolved the matter through changing the investment model, and amending the concession agreements accordingly. RWE said that the amendments have now been approved by the cabinet and ratified by parliament. The foreign partners will take full responsibility for the investment in the new fields and the entire output will be offered for sale to the government, via EGAS and the Egyptian General Petroleum Corporation. No details have been provided about the price, but it is expected to be broadly in line with prices in the main global gas markets. Ownership of the assets will pass to the government once production starts.
The agreement has come not a moment too soon for Egypt. Mr. Fahmy has pursued an aggressive agenda of promoting natural gas exports since he became minister in 1999, but his success in this sphere has prompted criticism that he has not taken sufficient care to ensure supplies for the domestic market. These concerns have been amplified by the lack of activity related to the development of new gas fields. In a sign of incipient tightness of supply, Egypt's exports of liquefied natural gas (LNG) slipped slightly last year (although pipeline exports increased) and there have been reports of increased use of light fuel oil in power stations owing to shortages of natural gas. The new gas from BP and RWE will increase supply by about 15%, compared with 2009 output, and other companies that are sitting on reserves are likely to adopt the new investment model to develop their fields.
The Economist Intelligence Unit forecasts that natural gas demand will rise from an estimated 40m tonnes of oil equivalent (roughly 44bn cu meters) in 2010 to 62.6m toe (68.9bn cu meters) at the end of the decade. Assuming that investment in new capacity picks up in response to the BP/RWE deal, we expect that there will be sufficient supply to meet this extra demand and to leave a modest surplus for export. However, the chance of Egypt increasing exports compared with current levels seems to be slim. (ViewsWire 29.07)
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11.5 EGYPT: Airlines Flying Far
The Oxford Business Group says 2010 is shaping up to be a banner one for Egypt's air transport sector. Thanks to a worldwide industry rebound, steady passenger growth throughout the Arab world, continuing development of the country's airport infrastructure and the recent entry of a host of low-cost carriers (LCCs) into the market, the months ahead look bright.
Earlier this month, the International Air Transport Association (IATA) revised its global forecast for the year. Whereas just three months ago it projected a $2.8bn loss for the worldwide airline industry, it now projects a $2.5bn profit. It expects Middle Eastern carriers to net $100m, their first profit since 2005, which is a marked improvement over the $600m they lost last year.
According to Brian Pearce, the IATA's chief economist, Egypt is particularly well positioned to benefit from this turnaround. As he pointed out to Arabian Aerospace, the country's overall economic growth "has been relatively robust. The Egyptian economy slowed down to a 4.7% [growth rate] last year, which is lower than we've seen before, but there was growth during a global recession." That growth has been reflected in the airline sector, where Egypt has proved to be something of an exception. Whereas most of the region's national carriers fared poorly in 2009 — a year that many insiders have called the worst in the sector's history - Egypt saw a 4% increase in scheduled departures. With the H1N1 pandemic behind them and with Egypt's airport infrastructure continuing to develop, Pearce projects further growth in the months ahead.
On the basis of its actions, national carrier Egyptair seems to agree with this assessment. It has recently taken delivery of its second Boeing 777-300 aircraft, and it intends to take delivery of two more 777s, as well as two A330s, later this year. It is also expanding its routes, adding non-stop service to Dubai in June and to Copenhagen in October. Moreover, it recently announced a new code-sharing agreement with Turkish Airlines, which is itself expanding in the Egyptian market by adding service to Alexandria.
More important than Egyptair's growth, particularly in the medium to long term, is the recent entry of LCCs into the Egyptian market. First was Al Misria Universal Airlines, which began service in late 2009. Hassan Aziz, the company's president and CEO, said that he wanted to take advantage of low prices during the global financial downturn to found a company that could tap growing demand in Egypt, the Arab world's most populous country. Al Misria took possession of its first A320 in April 2009 and hopes to expand the fleet to 10 planes in five years.
Other investors agree with Aziz's assessment. Two other new carriers, Nile Air and Nesma Airlines, plan to begin operations in the near future. Foreign LCCs have also begun to move into the Egyptian market. Flydubai has begun offering service to Alexandria, Luxor and Assiut, and Gulf Air has announced that it will begin serving Alexandria later this month.
But the biggest news is Air Arabia's decision to add a third hub in Egypt. UAE carrier Air Arabia, the Arab world's largest listed airline, formed a joint venture with Travco, the Egypt-based travel and hospitality group which is the biggest in the Middle East, in late 2009. "Linking up with [an] established travel company like Travco rather than another airline made sense given the size of the international tourist market" in Egypt, said Air Arabian's CEO, Adel Ali. The plan is for Air Arabia to handle operations while Travco provides access to its network of tour operators, helps with marketing and assists with government relations.
The new carrier, which started operating this month with two A320s based out of Alexandria, plans to serve Europe, the Middle East and Africa and hopes to expand quickly. It expects to have four to six planes by the end of the year, and is already in discussions about adding another hub in Egypt by the Red Sea. "Low-cost air travel represents 25% of the market in Europe, [and] a miniscule 7% in the Middle East," Ali said. Furthermore, incomes are lower in the Middle East, making such travel particularly attractive. Given this market structure, Ali anticipates steady expansion of the LCC sector. There will obviously be struggle over market share between the LCCs and incumbents, but, Pearce said, "because Egypt has a fast-growing economy I think there's a scope to stimulate the market overall. It certainly means there's more pressure for innovation and cost-cutting."
While additional hurdles remain, including a dispute with Saudi Arabia over sharing airspace and the need to formulate a true "open skies" policy, much progress has been made so far and Egypt is well on its way to realizing its ambition of turning Cairo into a major air hub. (OBG 26.07)
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11.6 TUNISIA: Economy Reality Check
The Economist Intelligence Unit reported on 14 July that the Tunisian government has trimmed its targets in its recently approved development plan for 2010-14, reflecting a more sober assessment of what is achievable in light of the uncertain outlook for the EU, the country's main export market. The IMF has meanwhile encouraged the government to diversify its export markets so as to reduce its dependence on Europe.
Tunisian development plans originated in the dirigiste 1960s and have survived, along with the top-down system of control, despite progress towards a market-driven system. They are useful as ‘roadmaps' of government intentions and investment priorities. Development plans usually cover five-year periods, but the new plan, which is being labeled the 12th Development Plan, is beginning before the end of the 11th Plan, which was supposed to run from 2007-11. This may partly be because the global financial crisis has required a revision of earlier goals, and partly to align the plan with the "presidential program," which is essentially the manifesto of the president, Zine el-Abidine Ben Ali for the 2009 elections, which also runs to 2014 (Mr. Ben Ali's final year of office unless he seeks to change the constitution to allow him to rule on into his 80s).
Targets Trimmed
The 12th Plan targets average annual growth of 5.5%, which is more than the average 4.7% growth achieved in the five years to 2009, but less than both the 6.1% average growth goal of the 11th Plan and the 6% that is needed to reduce unemployment significantly. However, given the slow rate of growth expected in the EU over the next few years, 5.5% is a more achievable goal.
The plan's targets include:
- Some70% of growth to come from services, about 25% from industry and just under 5% from agriculture, which looks reasonable;
- The proportion of economic activities with "high knowledge content" is targeted to rise to 30% by 2014 from 25% today - which seems a particularly modest ambition given the government's emphasis on building a knowledge economy;
- Lifting per-person incomes to over TD8,300 by 2014 ($5,685) (from some TD5,150 today);
- Creating 415,000 jobs and reducing the unemployment rate to 11.6% in 2014, from 14.7% in 2009 - another relatively un-ambitious goal given that the government says that reducing unemployment is its main priority;
- Total investment in the economy to reach 26% of GDP by 2014, from around 24% today - with the private sector's share in investment to reach 60.8% by 2014;
- Foreign direct investment (FDI) to average of TD3.25bn per year up to 2014, compared with an average of TD2.64bn/yr in the five years 2005-09, which will probably be achievable, especially if further telecoms privatizations to take place;
- Budget deficit to be kept below 2.7% of GDP (which will be hard to do if the economy needs further stimulus) and the public debt to be reduced to 40.4% of GDP from around 51% today.
In many respects, therefore, the 12th Plan is relatively modest in its ambitions, which suggests that planners and the government have undertaken a reality check in the light of the global economic crisis.
Recovery Set to Falter
The Tunisian economy has been showing some encouraging signs of later, in particular in industrial production. However, the poor outlook for the EU continues to cast a cloud over future prospects. Real GDP growth slowed to 3% in 2009, owing to a decline in exports. Lower agricultural output due to a shortage of rain in crucial periods will offset industrial growth in 2010. Tourism receipts fell by 1% in the first six months of the year to TD1.4bn, compared with the same period last year and growth in this sector remains uncertain. The government will attempt to maintain high spending growth to stimulate the economy but will be constrained by limited revenue. We forecast that the economy will grow by 3.3% in 2010 but will fall to 2.4% in 2011, on the back of weak growth in the EU. The impact of the EU crisis will be felt more strongly in 2011, leading to slower growth in exports.
IMF Urges Diversification
The IMF has just completed its Article IV consultation with the government, and has broadly approved its policy approach to dealing with the effects of the recession. In the medium term, the IMF stressed that Tunisia's goals of reducing unemployment through sustained growth required the diversification of export markets and the development of high value-added sectors in order to strengthen the resilience of the economy to external shocks. The fund noted that the unemployment rate, already relatively high, particularly among young graduates, had increased slightly in 2009 as a result of the economic slowdown. The IMF said that in the likely event that the economies of Tunisia's traditional partners would grow slowly in the medium term, efforts by the authorities and local businesses to develop new markets and identify new sources of growth must deliver results rapidly if they are to enhance the potential for long-term growth.
The IMF's recommendations chime with the thinking of the government. The government has for some years planned a qualitative shift in the economy to higher added-value industries and services. The organization that represents Tunisian industrial firms, the Tunisian Union of Industry, Commerce and Handicrafts (UTICA), recently called on member firms to make greater efforts to develop export markets in Africa, Asia and the US, to reduce Tunisia's vulnerability to economic shocks in the EU. (EIU 14.07)
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11.7 GREECE: Greek Government Hauls in Billions in Back Taxes
Daniel Steinvorth writes in Der Spiegel (http://www.spiegel.de) that in a bid to increase revenues, the Greek authorities are employing all kinds of clever tricks to crack down on tax cheats, including using Google Earth to find undeclared swimming pools. But efforts by the government to liberalize markets could unleash a wave of civil unrest.
There are very few people who can speak passionately about statistics and use words like "logical beauty," "great purity" and "pure poetry" when talking about ordinary numbers. But when Nikolaos Logothetis, 57, expounds on numbers, it sounds like a love poem. "The science of statistics has its own language," says Logothetis, a tall, thin Greek with a carefully trimmed beard and professorial glasses. "We only have to listen attentively to what it has to say, if we want to understand the ills afflicting our country." This is a remarkable statement to make in Greece, which currently has the reputation of being the home of fudged and forged statistics.
It's a sultry July evening in Athens and Logothetis is sitting in an exclusive restaurant on the city's Kolonaki Square. The mathematician and aesthete became the deputy head of the newly-created, independent Hellenic Statistical Authority (ELSTAT) just a few hours earlier. He has loosened his tie, ordered an after-work beer and, in polished Oxford English, given a short lecture on numbers. Logothetis is proud of this fresh start and he plans to introduce radical reforms. "In the future, we will only be accountable to the parliament," he says. "There will no longer be directives from the government. We want to finally be able to work as an independent scientific institution."
A Clean Sweep
"Greek statistics" has become something of a running joke in Brussels and Strasbourg. The term stands for tricks, political manipulation and creative accounting. It stands for the entire Greek tragedy, for the numbers-juggling that drove the country to the brink of bankruptcy, and for the statistical pipe dreams of Logothetis' predecessors - one of whom has already fled abroad.
But Logothetis doesn't want to talk about the mistakes of the past. He would rather talk about the future. He wants to be one of the men who get Greece's numbers back in order. He wants to make a clean sweep. "If there is even a hint of political influence," he says, "I'll hand in my notice, I promise you that."
There is apparently a sea change underway in Greece these days, the Mediterranean country where, according to one government official, "virtually everyone cheats, and virtually everyone evades taxes." The Greeks, out of necessity, are about to embark on a kind of cultural revolution. The money that has been pledged to save them from collapse comes with stringent conditions.
The so-called troika of the European Union (EU), the International Monetary Fund (IMF) and the European Central Bank (ECB) has been in the country again since Monday of last week. The three auditors are to decide again if the efforts made to date by the government of Greek Prime Minister George Papandreou have been sufficient to warrant the transfer of an additional €9 billion ($11.7 billion) out of a total bailout package of €110 billion over three years, which the euro zone countries and the IMF have pledged to provide. The Dane Poul Thomsen, the Belgian Servaas Deroose and the German Klaus Masuch have taken up residence in the luxurious Grande Bretagne hotel in Athens. The three Europeans have the Greeks trembling with fear because, during their two-week inspection tour through the ministries and agencies, all doors and books have to be opened to the men in dark suits. "We Greeks have long since lost all sovereignty," says one hotel manager. "They are the real rulers in this country."
Uncovering Fraud on a Grand Scale
In addition to Logothetis, the statistician, there is a second man who stands for a possible fresh start in Athens and the desire for change: Ioannis Kapeleris, the head of Greece's financial crimes squad, the SDOE, which was founded in December to combat tax evasion. Kapeleris, 50, is currently the busiest worker in the Papandreou administration. His workday begins every morning at 7 a.m., in a vast room decorated with Byzantine icons, where three phones continuously ring. This is where he receives his visitors: tired from lack of sleep, smoking, gripping a coffee mug in one hand and wearing a partially unbuttoned shirt.
"Take a look at this," he says, and pulls out a printed Excel table from a pile of documents in front of him. "Here you can see how many cases of tax fraud the Greek state was able to document in the Athens tourist sector in June 2009. Five hundred and six. Do you know how many we found in June 2010? Four thousand, three hundred and forty." Another table lists the names of doctors, who are considered in Greece to be particularly corrupt. "In May we uncovered 4,357 cases of tax evasion among our doctors," says Kapeleris. "In May of last year it was only 24."
Tracking Down Swimming Pools
His staff has become very creative when it comes to tracking down tax offenders: They use police helicopters to fly over Athens' affluent suburbs and make films of homes owned by doctors, lawyers and businesspeople. They use satellite pictures by Google Earth to locate country villas, swimming pools and properties. These tactics have revealed that the suburbs didn't have 324 swimming pools, as was reported, but rather 16,974.
Tax fraud investigators spent a number of weeks on nightclub parking lots in Athens and noted down the registration numbers of luxury sedans. Their investigation revealed that approximately 6,000 car owners have vehicles worth €100,000, but only reported to the tax authorities that they have an annual income of €10,000. "We are making it increasingly difficult to cheat," says Kapeleris, "and we are making sure that not just the small fish but also the big fish get caught in the net."
The socialist PASOK government has called on the SDOE to drum up at least €1.2 billion in 2010, as outlined in Prime Minister Papandreou's austerity program. In the first six months of this year, however, investigators have already taken in over €1.8 billion in back taxes and fines. An interim report by the IMF acknowledges "impressive improvements" that have been observed in trimming the government's budget - although this primarily referred to severe cutbacks to salaries and pensions.
Conflict Guaranteed
But the auditors will most likely continue to exert pressure on Papandreou. Athens urgently needs to curb skyrocketing costs in the Greek health system, liberalize the labor and energy markets and privatize loss-making state-owned companies - primarily Hellenic Railways, which owes nearly €10 billion, making it the most debt-ridden railway in Europe.
Privatizations and cutbacks in the public sector - in Greece, such measures are guaranteed to lead to conflicts. Over the past week, truck and tank truck drivers protested efforts to liberalize their profession in line with EU regulations. The sale of coveted truck licenses has, up to now, ensured that they can retire with ample pensions, but now authorities want to do away with these costly concessions and open up the trucking market.
Was this a sign of much worse conflicts looming on the horizon? The chaos at Greek filling stations that thousands of tank truck drivers unleashed in the middle of the high season provided merely a small taste of the wave of strikes that is expected to roll across Greece over the coming weeks.
Unpleasant Times Ahead
Kostas Papantoniou, 59, a civil servant and the vice president of the powerful civil servants' union, predicts that the government will face far more unpleasant times. "They say that Greek civil servants are too expensive and too numerous," says Papantoniou, "but that hardly corresponds with reality. Eighty percent of us earn between €700 and €1,400 a month net. Would you call that privileged?"
There is no doubt, however, that permanent positions in the public sector are often awarded very generously, all too often in the wake of elections. Up until last week, nobody could say precisely how many jobs were concerned. Then the government launched a detailed census on the internet and had teachers, police officers and firefighters fill out an online form, providing for the first time a clear picture of the number of people on state payrolls. Since last Friday, they now know that it is 768,000. The planned cutbacks in salaries and bonuses will hit many of them extremely hard.
Among the angriest civil servants are those who intend to retire this year. They are actually entitled to a one-off payment from the civil servants' retirement fund that they have paid into for decades - on average €40,000. But to avoid further burdening the budget, the socialist government has temporarily put a stop to these payments. The idea is to ensure that there is the maximum amount of money possible in the public coffers when they are inspected by the IMF and EU auditors.
Creative Accounting
By delaying these payments, though, the state is surreptitiously accumulating new debts, argues Athens business journalist George Kyrtsos. "While the government is paying its debts abroad on time, domestic payments are simply being postponed," he says. "This can't work in the long run."
For months now, some 4,000 former employees of the recently privatized Olympic Airlines have been waiting for severance payments from the state. The state has also withheld reimbursements of value-added tax for companies. The amazingly reduced government budget that the Papandreou government intends to use to impress the European Union and the IMF could once again be attributed to very Greek and very creative accounting - and turn out to be yet another example of the notorious "Greek statistics." (Der Spiegel 02.08)
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