TOP STORIES
TABLE OF CONTENTS:
1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS
1.1 Israel's Cabinet Approves Extended Summer Time
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2: ISRAEL MARKET & BUSINESS NEWS
2.1 $2 Million Israel - Massachusetts Partnership Unveiled
2.2 BIRD to Invest $8.1 Million in Nine New Projects
2.3 McKinsey Advised Tnuva to Raise Prices
2.4 Noble Energy Begins Leviathan 3 Drilling
2.5 Marketing in Israel Begins for China's Great Wall Pick-Up Trucks
2.6 Ybrant Digital to Acquire Stake In Web 3.0
2.7 Plasan Acquires KaZaK Composites
2.8 Gizmox Receives Strategic Investment from Citrix Systems
2.9 Soluto Secures $10.5 Million in Round B Funding Led by Index Ventures
2.10 Hello Kitty Arrives in Israel
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3: REGIONAL PRIVATE SECTOR NEWS
3.1 Only 10% of Firms Say Deterred from Mideast by Arab Spring
3.2 Brazil's Embraer Sees Strong Middle East Demand for Smaller Jets
3.3 US Pancake Chain IHOP Heads to the Middle East
3.4 Jordan's $1 Billion Medical Tourism Sector Coveted by GCC
3.5 Motorcycle Safety Foundation Supports Motorcycling Return to Jordan
3.6 Tiffany & Co Opens Regional HQ in Dubai
3.7 UAE's Car Re-Exports Stage a Quick Revival
3.8 Northrop Unit Wins Oman Airports Deal
3.9 US Firm Wins Deal for Saudi Real Estate Mega Project
3.10 HID Global Delivers Multi-Technology National ID Cards to Saudi Arabia
3.11 Gap to Open Stores in Egypt and Morocco in 2011
3.12 Egypt's Passenger Car Market Dropped By 30.2% in May 2011
3.13 Era Selected for Two Oman Surveillance Solutions
3.14 Greece's Medical Device Market
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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS
4.1 Pythagoras Solar Wins GE Ecomagination Innovation Award
4.2 Energy Technology Ventures Invests in Israeli Wastewater-to-Electricity Company Emefcy
4.3 HelioFocus Reveals HelioBooster
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5: ARAB STATE & PAKISTANI DEVELOPMENTS
5.1 Lebanon's Consumer Prices See Record May Rise
5.2 Barclays Capital Says Beirut Faces Major Long-Standing Challenges
5.3 Wealth of Middle East's Super-Rich Exceeds $1.7 Trillion
5.4 Jordan Receives Nuclear Reactor Bids
5.5 High Cost Of Living Plagues Jordanians
5.6 Kuwait Approves Record Budget With Deficit
5.7 Kuwait's Inflation Increases to a To Five-Month High
5.8 May's Prices in Qatar Rise for Seventh Consecutive Month
5.9 Dubai Exports & Re-Exports Hit Three-Year High in May
5.10 Dubai First Quarter Direct Trade Jumps By 34%
5.11 Tourism to Contribute $1.93 Billion to Oman's GDP
5.12 Trade Between Egypt & US Increases by 10.4%
5.13 Egypt Not To Borrow From IMF & World Bank as Cairo Lowers Expenditure Plans
5.14 Egypt Narrows Target Budget Deficit to 8.6% of GDP from Previous 11%
5.15 US to Cancel One-Third of Egypt's Debt Over Three Years
5.16 Egypt Signs MOU for $900 million in Economic Aid from Saudi Arabia
5.17 Egyptian Internet Subscribers Increase by 170,000 Subscribers in March 2011
5.18 Algeria's Trade Surplus Rose To $10.3 Billion In 5 Months
5.19 Morocco Agribusiness Report Q3 2011
5.20 Pakistan's Fuel Scarcity & Unpaid Bills Shutter 12 Power Plants
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6: TURKISH, CYPRIOT, GREEK & BULGARIAN DEVELOPMENTS
6.1 Turkey's Inflation Slows To Annual 6.24% In June
6.2 Turkey to Implement Additional Tariffs on Certain Fabric & Apparel Imports
6.3 Israeli Tourist Numbers to Turkey Cut In Half In 2011
6.4 US Company to Begin Drilling in Cyprus Offshore Waters by Year End
6.5 Greece Avoids Insolvency by Passing Austerity Package
6.6 Bulgaria's Annual Inflation Rate Reaches 5.6%
6.7 Bulgaria's New Car Market Starts To Improve in First Quarter
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7: GENERAL NEWS AND INTEREST
*ISRAEL:
7.1 Jewish-Druze Celebration Planned
7.2 17th of Tammuz Fast Day
7.3 IDF's 1st Female Major-General Takes Charge
7.4 Labrador Most Popular Dog in Israel
*REGIONAL:
7.5 Jordan's PM Announces Cabinet Reshuffle
7.6 Egypt's Mubarak Misappropriated $185 Billion of Foreign Aid
7.7 43% Of Egyptians Do Not Know Their Prime Minister's Name
7.8 Moroccans Approve Draft Constitution
7.9 Turkish Parliament Sworn In Despite 170 Deputies Missing
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8: ISRAEL LIFE SCIENCE NEWS
8.1 BioLineRx & Yissum Deal for Treatment BL-7040 for Inflammatory Bowel Disease
8.2 Rosetta Genomics & UC Davis Develop microRNA Biomarker for Bladder Cancer Treatment
8.3 Abbott to Fund Pharmaceutical & Diagnostics Research at the Weizmann Institute
8.4 Teva Enters Israeli Infant Formula Market
8.5 CEL-SCI Announces Start of Multikine Phase III Study by Teva in Israel
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9: ISRAEL PRODUCT & TECHNOLOGY NEWS
9.1 Tier One Carrier Selects Traffix Diameter Router Solution for LTE Network Deployment
9.2 Elbit Systems to Supply DIRCM Systems to the Italian Air Force
9.3 MiniFrame Launches a New Multi-seat Product for Home Users
9.4 Mellanox Accelerates Half of the World's Petaflop Systems
9.5 RiT to Provide its IIM Solution for Datacenter Management to Global Financial Institution
9.6 Golan Heights Winery Sweeps Top International Prizes
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10: ISRAEL ECONOMIC STATISTICS
10.1 Israel's Unemployment Hits Historic Low
10.2 Mixed Healthcare News for Israel in OECD Report
10.3 Israeli Food Prices Outstrip Europe By Far
10.4 Israel Leads in Regressive Taxation
10.5 Defense Consumption in 2009: 6% of Israel's GDP
10.6 Israel Ranked 14th in Global Innovation
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11: IN DEPTH
11.1 ISRAEL: Macro Smile - Say Cheese
11.2 JORDAN: Planning For the Future
11.3 KUWAIT: Prime Ministerial Dilemma and the Prospects for Constitutional Monarchy
11.4 EGYPT: Fitch Affirms Egypt at 'BB'; Outlook Negative Ratings
11.5 EGYPT: After the Revolution - Egypt's Struggle to Reinvent Itself
11.6 EGYPT: Defense and Security Report for Q3 2011
11.7 EGYPT: Need for 86 Billion Cubic Meters of Water By 2017 Attracts Investors Interest
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1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS
1.1 Israel's Cabinet Approves Extended Summer Time
On 3 July, the Netanyahu government unanimously approved the amendment to extend summer time in accordance with the recommendations of the professional committee appointed by the Minister of Interior. The amendment calls for summer time to be lengthened to 193 days on average, instead of its current 182 days. The new summer time will go into effect every year on the last Friday of March at 2am, and will end on the first Sunday after October 1 at 2am. The extension of summer time will improve coordination with Europe, will extend daylight hours and will save electricity and other resources. The Cabinet authorized the Ministerial Committee for Legislative Affairs to discuss the amendment, and to present it to the Knesset, so that it can go into effect already this year. Summer time in Israel will begin before summer time begins in Europe, and will end before summer time ends in Europe. In the case that summer time will end on a religious holiday, the change in time will be delayed until the end of the holiday. (Globes 03.07)
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2: ISRAEL MARKET & BUSINESS NEWS
2.1 $2 Million Israel - Massachusetts Partnership Unveiled
Massachusetts and Israel have unveiled an agreement designed to encourage the development of collaborative projects in the life sciences, clean energy and technology sectors. As part of the new Massachusetts-Israel Innovation Partnership, Massachusetts will commit nearly $1 million for Bay State companies that are engaged in industrial research and development projects with an identified Israeli partner company. In return, Israel's Office of the Chief Scientist will provide up to $1 million in matching dollars for the Israeli partner companies. Massachusetts' Gov. Deval Patrick said the deal will drive innovation and promote job growth in Massachusetts and Israel. The administration said the deal was the result of Patrick's 10-day trade mission to Israel and the UK in March. Massachusetts is the first state to enter into such an agreement with Israel. (Various 02.7)
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2.2 BIRD to Invest $8.1 Million in Nine New Projects
During its meeting recently, held in Washington, D.C., the Board of Governors of the Israel-U.S. Binational Industrial Research and Development (BIRD) Foundation, approved $8.1 million of funding for nine new projects between Israeli and American companies. In addition to the grants from BIRD, the projects will access private sector funding, boosting the total value of all projects to $24 million.
The BIRD Foundation promotes collaboration between Israeli and American companies in various technological fields for the purpose of joint product development. Specifically, the Foundation assists by locating strategic partners from each country, making the necessary introductions and providing conditional grants of up to $1 million for approved projects.
The nine projects approved by the Board of Governors add to the more than 820 projects in which the BIRD Foundation has invested over its 34 year history. To date, BIRD's total investment in these projects has exceeded $290 million, helping to generate direct and indirect sales of more than $8 billion.
The approved projects are as follows:
- ART Healthcare and Hydrofera (Willimantic, CT) will develop a device to reduce infections in intensive care units.
- BioMarCare Technologies and Ariadne (Rockville, MD) will develop a companion diagnostic test for metastatic colorectal cancer.
- Evogene and Pioneer Hi-Bred International (Johnston, IA) will develop soybean varieties tolerant to foliar diseases.
- Healarium and The Mayo Clinic (Rochester, MN) will develop an application for self monitoring of cardiovascular risk.
- Human Monitoring and Access Systems America (Sunnyvale, CA) will develop a social e-publishing ecosystem for interactive content.
- Mantis Vision and Direct Dimensions (Owings Mills, MD) will develop a 3D imaging system for facilities' measurements.
- RicorSolar and U.S. Company will develop a high efficiency energy system for small commercial applications.
- Ron Soferman and Affine Systems (San Francisco, CA) will develop an online video ad targeting application using computer vision technology.
- Semantic Medical Solutions and Sitel/MedStar Health (Washington, D.C.) will develop a semantic medical simulation platform.
The deadline for submission of Executive Summaries for the next BIRD cycle is 15 September, 2011. Approval of projects will take place in December 2011.
The BIRD (Binational Industrial Research and Development) Foundation http://www.birdf.com works to encourage cooperation between Israeli and American companies in the various areas of technology, and provides free assistance in locating strategic partners from both countries for developing joint products. During its 34 years, the BIRD Foundation has invested in more than 820 projects, which have yielded direct and indirect revenues of about $8 billion. The BIRD Foundation supports projects without receiving any rights in the participating companies or in the project itself. The financial assistance is repaid as royalties from sales. The Foundation provides support of up to 50% of a project's budget, beginning with R&D and ending with the initial stages of sales and marketing. The Foundation shares the risk and does not demand that the investment be repaid if the project fails to reach the sales stage. (BirdF 05.07)
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2.3 McKinsey Advised Tnuva to Raise Prices
On 26 June, 'Globes reported that Tnuva Food Industries adopted a policy of raising prices to create value quickly for the company, after it received a report by McKinsey & Company advising it that it could raise prices for products without harming demand. Sources say that after Tnuva was acquired by Apax Partners, Tnuva executives were told to present a "100-days plan" to create value. The plan was nicknamed "quick wins". Apax commissioned McKinsey to examine Tnuva's pricing ability. It was found that demand for cottage cheese, yellow cheese, and white cheese was inelastic, which was why Tnuva could raise prices by at least 15% without affecting demand. Apax's policy is to buy companies, increase their value and sell them within six years. Sources at Tnuva says that its managers were ordered to present a three-year plan for 2009-11 with the objective of using Tnuva's financial report for 2011 as the basis for the sale of the company by Apax. The current cottage cheese crisis is liable to affect Apax's plans, if the government intervenes and expands price controls on dairy products, which could affect Tnuva's valuation. (Globes 26.06)
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2.4 Noble Energy Begins Leviathan 3 Drilling
Noble Energy has begun drilling the Leviathan 3 well after receiving approval from the Ministry of National Infrastructures Petroleum Supervisor. The company said that the drilling would begin soon. Noble will continue monitoring and controlling the drilling at Leviathan 2 and to make preparations to seal the well. Approval to begin drilling at Leviathan 3 was given after review of the testing reports about the breakdown at the Leviathan 2 drilling was completed. The drilling there was halted in the middle of May following a problem in the cementing process. The plan for drilling Leviathan 3 includes various steps taken by the company to prevent the recurrence of similar problems. Leviathan 3 is located 4.4 kilometers from Leviathan 2 and is due to be drilled to a depth of 5,300 meters. Drilling will last 3 months and cost $70 million. (Globes 26.06)
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2.5 Marketing in Israel Begins for China's Great Wall Pick-Up Trucks
Hamizrach has begun marketing in Israel pick-up trucks made by China's Great Wall Motor Company. The model will be a pick-up with a 2.4-liter 150-horsepower engine made by Japan's Mitsubishi Motors Corporation. The pick-up trucks will have an option for conversion to natural gas, which costs half the price of gasoline at the pump. The cost of the Great Wall pick-up will range from NIS 135,000 for the basic double cabin model to NIS 169,000 for the luxury model, which includes leather seats and a touch-screen multimedia system. Each Great Wall pick-up will be offered with a fueling package from GasPro at a cost of NIS 269 per month for 36 months. Hamizrach will eventually market in Israel a range of Great Wall vehicles over the coming year, subject to the vehicles achieving Euro 5 emission standard compliance. The company plans to offer a modern jeep, which is already marketed in Italy and elsewhere in Europe, and a compact urban car aimed at competing with the Super Mini. Hamizrach believes that it will be able to market a Great Wall family car in 2013, in order to compete in the primary market segment, and other recreation vehicles. Hamizrach will open showrooms outside of Greater Tel Aviv next year. (Globes 26.06)
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2.6 Ybrant Digital to Acquire Stake in Web 3.0
Hyderabad, India's Ybrant Digital, the global digital marketing company, announced its intention to acquire a minority stake in the company, Web 3.0 out of Israel. Web 3.0 operates in most growing digital fields – the web, mobile web and performance based marketing and applications development. Ybrant Digital's investment in Web 3.0 comes in the wake of major joint initiatives the companies are making in the mobile space. The innovations in the digital media have transformed how people connect, communicate and collaborate. Ybrant has learnt in order to be a leader in the space, one needs to constantly adapt to the changing market conditions. Web 3.0 is Ybrant's third acquisition in Israel. In April, it acquired embedded picture company PicApp for $10 million and in it acquired digital advertising company Oridian Online Media Solutions for $15 million in 2007.
Web 3.0 is a privately owned, digital media holdings company, operating since 2006. It is a well-established company in Israel with a high annual growth rate year-on-year since inception. The company holds assets in most growing digital fields – the web, mobile web and performance based marketing and applications development. (Ybrant Digital 27.06)
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2.7 Plasan Acquires KaZaK Composites
Plasan announced the acquisition of KaZaK Composites; a Massachusetts-based engineering design and manufacturing company specializing in pultrusion processing. KaZaK Composites is a premier provider of value-added composite engineering. KaZaK specializes in high performance composite structures and low-cost automated composite manufacturing. From design and analysis through prototyping and manufacturing, KaZaK's technology offers a variety of applications in ship structures, building structures, space systems and numerous commercial applications. KaZaK Composites has ongoing activities with most U.S. Department of Defense agencies, including the Army, Navy, Air Force, Marines, Missile Defense Agency and DARPA. They also have performed R&D and/or production for NSF, DOT, DOE and NASA, in addition to many major aerospace and defense contractors. The KaZak acquisition is the latest in a series of moves by Plasan to consolidate its position as the leading manufacturer of composite materials for both automotive and defense applications. Kibbutz Sasa's Plasan (http://www.plasansasa.com/) provides customized survivability solutions for tactical wheeled vehicles, aircraft, naval platforms, civilian armored vehicles and personal protection. A recognized global leader and industry veteran, Plasan's survivability solutions offer the optimal combination of protection, payload, and cost by combining in-house R&D, design, prototyping and manufacturing capabilities. (Plasan 28.06)
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2.8 Gizmox Receives Strategic Investment from Citrix Systems
Gizmox, http://www.visualwebgui.com, the developer of the award-winning Visual WebGui (VWG) web, cloud and mobile delivery platform, announced today that it has received a strategic investment from Citrix Systems. As part of the investment, Gizmox and Citrix are working together to enable enterprises to deliver existing and new applications to the rapidly expanding set of HTML5-enabled devices. This will drive further innovation in delivering applications to any device, anywhere. VWG technology enables data-centric enterprise applications to run on HTML5 Web, Cloud and Mobile platforms as secured-by-design rich applications without plug-ins. In 3 years, Visual WebGui has more than 1,000,000 downloads of its software and over 35,000 VWG applications that are already in production, at first tier organizations such as SAP, IBM, Visa, Thomson Reuters, Shell, Texas Instruments, Good Year and major banks, medical, government and military institutions. (Gizmox 30.06)
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2.9 Soluto Secures $10.5 Million in Round B Funding Led by Index Ventures
Soluto, the creator of 'Anti-Frustration Software' and the PC Genome knowledgebase, has secured $10.5 million in Series B funding. Index Ventures led the round with participation from existing partners Bessemer Venture Partners (BVP), Giza Venture Capital and Proxima Ventures. Soluto's patent-pending technology detects when a user is frustrated by his PC and tells him which application is causing it. Soluto then harnesses the power of the crowd to understand which actions really eliminate frustrations and improve the overall user experience. This collective user wisdom, in the form of anonymous statistical data, is gathered automatically through the download and usage of Soluto's Anti-Frustration software, analyzed by Soluto and stored in the PC Genome, a knowledgebase of PC frustrations and solutions, gathered for the benefit of all users. Soluto's 'Anti-Frustration Software' is a Windows application, available for free download from: www.soluto.com/download. Having recently launched a new version of its Anti-Frustration software, Soluto now offers users three solutions to eliminate PC frustrations that they encounter, focusing in the windows boot, web-browsers, and application crashes.
Tel Aviv's Soluto http://www.soluto.com is the creator of Anti-Frustration Software. Soluto's software combines low-level driver technology with collective wisdom to detect user frustrations from computing devices, reveal their causes, learn which actions really eliminate them and improve the user's overall experience. (Soluto 24.06)
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2.10 Hello Kitty Arrives in Israel
The Hello Kitty brand is launching a chain of 18 stores in Israel at an initial investment of $2 - 3 million. Sanrio, the company which created the pink icon in 1974, has chosen Leader Brands as its local franchiser. The chain's first store is expected to open by the end of June at the Givatayim Mall and will offer a variety of items for young girls and women, starring the famous Japanese cat. This is not Sanrio's first attempt to conquer the Israeli market. In 2001, a franchiser named Kitland opened a Hello Kitty store at the Ramat Aviv Mall in Tel Aviv, but the cooperation with the Japanese company failed. Leader says its experience with Japanese companies in industry and retail is richer that the previous franchiser's and promises not to fail. Some of Sanrio's other brands – like My Melody, Chococat and Keroppi – are also expected to be sold by the chain in Israel. The Hello Kitty product basket will be presented in Israel under the "Small gift, big smile" slogan. The products include bags and purses, dolls, cups and bottles, beachwear, key rings, stationary and school equipment, jewelry, hair accessories, watches, items for the kitchen and home, laptop cases and a selection of washroom items. (Ynet 27.06)
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3: REGIONAL PRIVATE SECTOR NEWS
3.1 Only 10% of Firms Say Deterred from Mideast by Arab Spring
Only 10% of private companies have been put off doing further business in the Middle East following the impact of the Arab Spring, new research has revealed. Six months on from the start of the region's uprisings, which spread from North Africa to some Arabian Gulf states, businesses around the world said they were positive about the future for business in the Middle East, according Grant Thornton. The latest research from Grant Thornton's International Business Report (IBR) showed that as the region continues to experience political change, more than a fifth (22%) of privately owned companies said that it has had a negative impact on their business. This figure was highest in North America where over a quarter (26%) of businesses reported a negative impact. However, when asked if the situation is affecting their plans to do business in the region, only 10% globally said they are now less likely to do business there. Established economies are most positive about the outlook for the Middle East, with only 6% of North American and G7 companies saying they have been put off from developing business in the region. However, Turkey has been hit hard, with 36% of businesses saying they have felt a negative impact. (AB 25.06)
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3.2 Brazil's Embraer Sees Strong Middle East Demand for Smaller Jets
The Middle East, alongside China and Latin America, will drive growth in demand for smaller aircraft, Brazil's plane maker Embraer has said. The company, which in April delivered two planes to Oman Air with another two set to arrive in 2012, said growth in the Middle East for 30- to 120-seater aircraft would average 6.9% over the next 20 years. Embraer's report said only China (7.5%) and Latin America (7.2%) would see higher growth over that period. It said that although the global downturn in the industry was harsher, the recovery was faster than expected. Compared to the Middle East, Embraer said the more developed economies of North America and Europe would see lower demand due to their market maturity and slower economic recovery. Growth rates to 2030 will be 3.5% and 4.4% respectively. (AB 25.06)
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3.3 US Pancake Chain IHOP Heads to the Middle East
American pancake chain IHOP is set to open its doors in the Middle East after parent company DineEquity inked a franchise deal with Kuwait's MH Alshaya Co. The retail conglomerate plans to open 40 restaurants across the six Arabian Gulf states, Jordan, Lebanon and Egypt in the next five years, marking IHOP's first major expansion outside the US. The pancake chain will open its first branch within 12 months, the companies said in a joint statement. The financial terms of the deal were not disclosed. IHOP has 1,500 restaurants and a franchise pipeline of a further 300, the company said.
Alshaya, one of the Gulf's largest family-owned firms, has an extensive franchise portfolio that includes a string of US household name food and beverage brands. The company has closed franchises in the last six months for the Chicago-based chain Potbelly Sandwich Shop, and a 22-outlet deal for New-York listed chain The Cheesecake Factory. Alshaya operates 2,000 stores across 15 countries, and counts brands such as Starbucks, Pizza Express, American Eagle Boots and Pottery Barn in its portfolio. (IHOP 23.06)
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3.4 Jordan's $1 Billion Medical Tourism Sector Coveted by GCC
Jordan has seen a loss of medical tourists since the start of the unrest in the Middle East; potentially Arab Gulf nations could benefit as a result, Business Monitor International said. Jordan's Private Hospital Association (PHA) has reported that its members have seen a 25% fall in patient numbers as a direct consequence of regional instability. BMI analysts said more the stable states of the GCC could attract the patients instead but treatment prices in Saudi Arabia, the UAE and Qatar were too high, with the exception of Oman in which protests are also ongoing. BMI analysts said that while the UAE, Saudi Arabia or Qatar had made significant investments to encourage medical tourism, all suffered from having high treatment costs. In 2010, the PHA estimated that medical tourism in Jordan generated revenue of $1bn, which accounts for over 4% of the entire country's GDP. BMI said there had been a 90% fall in Libyan patient numbers, a 60% drop in Syria and a 50% drop from Yemen and Bahrain as patients have voted with their feet. In 2010, Jordan attracted more than 220,000 Arab patients and 45,000 foreigners, up 25%% from 2009 according to the PHA. In 2009, Iraqis represented the largest number of foreign patients seeking treatment in the kingdom, accounting for 19%, followed by Saudi Arabians (15%). (AB 25.06)
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3.5 Motorcycle Safety Foundation Supports Motorcycling Return to Jordan
After a 27-year hiatus, motorcycle licensing and registration returned to the Hashemite Kingdom of Jordan, thanks to King Abdullah II. He directed that a non-profit organization be the established to organize motorcycle registration and ownership in the Kingdom and provide a safe and professional training program. This resulted in the creation of the Royal Motorcycle Club of Jordan (RMCJ) who, in turn, contacted the Motorcycle Safety Foundation (MSF) in 2009. As a result, on 23 June, the RMCJ celebrated the grand opening of its MSF-recognized Training Center in Jordan. Like the MSF, the RMCJ's Training Center embraces the notion that all riders need a strong knowledge base, finely tuned skills and a safety-first mindset that includes risk management strategies in order to enjoy motorcycling to its fullest. The MSF's 23 separate RiderCourses, like some of the programs adopted by the RMCJ, are designed to provide an action plan to keep motorcycling safe and fun. The RMCJ's Training Center incorporates versions of MSF curricula that were adapted to the specific traffic and roadway needs in Jordan. Other aspects of the RMCJ's Safety Training Program include site management, program administration, student enrollment, RiderCoach training and certification, and more. As part of the program development, two RMCJ representatives traveled to the U.S. for training, which included successfully completing the 65-hour MSF RiderCoach Preparation Course. The MSF is a not-for-profit organization sponsored by BMW, BRP, Ducati, Harley-Davidson, Honda, Kawasaki, KTM, Piaggio, Suzuki, Triumph, Victory and Yamaha. (MSF 24.06)
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3.6 Tiffany & Co Opens Regional HQ in Dubai
US-based Tiffany & Co. has opened a new regional headquarters in Dubai. The Dubai base will oversee business development in the Middle East, Gulf Countries, East & Central Europe, Africa, Turkey and India, placing emerging markets at the center of Tiffany's globalization strategy. Over the next five years Tiffany & Co plans to more than double its network of boutiques in emerging markets. It currently has 35 stores in 15 countries throughout the region. Recently it opened its first freestanding boutique in Beirut, in association with Antoine Hakim. According to consultancy firm Bain & Company, emerging markets will be a key contributor to the anticipated 8% growth in worldwide luxury sales during 2011. Worldwide, Tiffany & Co. reported higher than expected net sales and earnings growth in its first quarter ended April 30, increasing 20% and 26% respectively. Tiffany's Dubai headquarters will become the fourth international representative office for the luxury jeweler outside the US. Dubai was chosen as much for its geographic location and pro-business environment as for its status as the region's fashion hub. Dubai now shares with London the top position as the most targeted retail destination in the world, drawing 56% of all international retail brands, according to property advisor CB Richard Ellis. The UAE has also emerged as the world's second most attractive international market for retail expansion. (AB 24.06)
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3.7 UAE's Car Re-Exports Stage a Quick Revival
Apart from a sustained surge in local sales, Dubai's automobile re-exports staged a quick turn-around through most of last year, rising to Dh9 billion and putting them on par with the pre-crisis levels of 2008. The bulk of these re-exports were destined for neighboring markets along with Iraq, Iran, Libya and Saudi Arabia. With the situation in two of these markets hit by strife and UN sanctions, re-export volumes from Dubai could take a serious hit this year, according to industry sources. Vehicle shipments to Iran recorded sharp value gains in the two years leading up to 2008, then went through a precipitous drop in 2009 and staged a minor recovery in 2010. Shipment volumes to Saudi Arabia were more volatile in comparison, with 2009 accounting for nearly Dh1 billion, a 244% growth over 2008. But last year demand was 20% lower. Iraq remains Dubai's largest automobile re-export market, with year-on-year value gains after a slight dip in 2006. In 2008, the value was up a robust 155% over 2007 and continued on this trajectory even during the height of the global crisis in 2009. Meanwhile, Dubai's total vehicle imports rose to Dh20 billion, a 33% year-on-year increase last year. (GN 27.06)
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3.8 Northrop Unit Wins Oman Airports Deal
Northrop Grumman Park Air Systems has won a deal to provide Advanced Surface Movement Guidance and Control Systems (A-SMGCS) for Muscat International and Salalah International airports in Oman. The company is the Europe-based air traffic management subsidiary of Northrop Grumman Corporation. The contract awarded by the Spanish information technology company Indra Sistemas forms part of the nationwide air traffic management modernization and upgrade program for the Directorate General of Meteorology and Air Navigation Services in Oman and is expected to be completed in April 2015. Northrop Grumman Park Air Systems will supply and install Nova 9000 A-SMGCS, including multi-lateration systems being supplied by teammate ERA. Indra Sistemas will supply the surface movement radars, which will be integrated into the Nova 9000 A-SMGCS. Northrop Grumman Park Air Systems, based in Norway and in the UK, supplies air traffic management systems for air-space operations worldwide. (TradeArabia 27.06)
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3.9 US Firm Wins Deal for Saudi Real Estate Mega Project
US-based Jacobs Engineering Group has been chosen by Injaz Development Company to provide infrastructure and construction supervision services for its Al Marina project in Saudi Arabia. Officials at Injaz Development Company, one of the largest real estate developers in Saudi Arabia, did not disclose the contract value. The Al Marina project is a 36 million square feet development that includes luxury villas, multi-use towers, buildings, coastal houses, hotels, schools, mosques and a variety of public and tourist facilities. Upon completion, Al Marina will be a new destination between Dammam and Khobar that will rival both in its public facilities, which will include a 300,000 sq m lagoon with elaborate fountains, waterfront shopping mall, open air recreational areas and high-rise commercial strips. Jacobs is one of the world's largest and most diverse providers of technical, professional, and construction services. (AB 28.06)
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3.10 HID Global Delivers Multi-Technology National ID Cards to Saudi Arabia
Irvine, California's HID Global announced that Saudi Arabia has increased requirements for national ID cards based on the company's LaserCard OSM (optical security media) technology. The multiple technology smart cards are issued to Saudi citizens for identification, e-government and regional travel purposes. LaserCard, part of HID Global, is a trusted supplier of secure Government ID solutions that are at the forefront of advanced ID credential design, manufacturing, ID system integration and end-to-end support services. Together with its partners, LaserCard enables government customers to protect their borders, citizens and services, and helps commercial clients safeguard their employees and assets. (HID 28.06)
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3.11 Gap to Open Stores in Egypt and Morocco in 2011
US clothing retailer Gap Inc. plans to open stores in Egypt and Morocco in 2011. The stores will represent the company's first venture into Africa, as part of the company's efforts to decrease its dependency on the North American market where sales have been declining. The company plans to open its first Gap store in Egypt in July 2011 and the first Gap and Banana Republic stores in Morocco in October 2011. The stores will house Gap, GapKids and babyGap collections and Banana Republic's accessible luxury clothes and accessories for men and women. (Beltone 30.06)
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3.12 Egypt's Passenger Car Market Dropped By 30.2% in May 2011
According to the Automotive Marketing Information Council (AMIC), Egypt's total vehicle market dropped by 32.4% y-o-y to reach 14,798 vehicles in May 2011 versus 21,896 vehicles in May 2010. The number of passenger cars sold in May 2011 dropped by 30.2% y-o-y to reach 11,182 cars in May 2011 versus 16,013 cars in May 2010, but grew by 26.6% m-o-m versus April 2011 when only 8,830 passenger cars were sold. Year-to-date (until May 2011), passenger car sales dropped, however, by 42.8% y-o-y, to reach 43,237 cars sold versus 75,608 cars sold in the same period last year. Meanwhile, bus sales fell by 55.0% y-o-y to reach 1,039 buses in May 2011 versus 2,307 buses in May 2010, whereas truck sales decreased by 27.9% y-o-y to reach 2,577 trucks in May 2011 versus 3,576 trucks in May 2010. (Beltone 22.06)
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3.13 Era Selected for Two Oman Surveillance Solutions
Era a.s., a subsidiary of Fairfax, Virginia's SRA International, announced it was selected by the Oman Civil Aviation Authority to deploy two multilateration surveillance solutions in Oman. The systems will be installed at the Muscat and Salalah airports, under a contract by Northrop Grumman Park Air Systems. The contract, awarded by Indra Sistemas, forms part of the nationwide air traffic management modernization and upgrade program for the Directorate General of Meteorology and Air Navigation Services in Oman. Muscat International Airport, Oman's principal international airport is currently undergoing a large infrastructure enhancement project in order to cope with the increased air traffic the airport has seen over the past decade. Between 2000 and 2010, movements at the airport have nearly doubled from 36,082 to 67,160 and are expected to grow at an expedited pace over the next decade, due in large part to a rapidly growing hub airline. Similar to Muscat Airport, Salalah Airport, the nation's second busiest, has also seen tremendous growth, going from serving 182,000 passengers in 2000 to 455,000 in 2010 and, like Muscat, expects large future growth. Era's next-generation surveillance solution was chosen for its ability to adapt to the significant changes that will occur at each of these airports, and to ensure that the surface operations run safely and efficiently both during and after the infrastructure enhancement projects. (SRA 24.06)
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3.14 Greece's Medical Device Market
Research and Markets http://www.researchandmarkets.com "The Medical Device Market: Greece" says Greece is one of the least affluent members of the European Union, but is still considerably richer than its immediate neighbors. The Economist Intelligence Unit estimates GDP to be $318.6 billion in 2011, with a 1.6% fall predicted this year. The economy is not predicted to grow until 2013. In 2010, it was revealed that the country's budget deficit in 2009 was 12.7%, four times the EU limit. Corruption was cited as the main cause of Greece's economic woes according to the President. The government is attempting to tackle this corruption and tax evasion.
There are a large number of doctors working in Greece, providing good hospital coverage. Current primary care provision is however weak; increased government investment and spending in this area is a key objective. The majority of hospitals in the public sector are underfunded. Private clinics are well funded but the high value equipment tends to be imported in both public and private healthcare sectors. Imports supply approximately 95% of the domestic market. In 2009, total imports of medical devices amounted to $1,357.3 million. The value of medical imports fell by 9.5% in 2009. In addition, 2010 saw a further fall of 28.3% in imports. Meanwhile, exports of medical equipment fell by 9.3% in 2009 but rose 1.4% in 2010 in US dollar terms. (R&M01.07)
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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS
4.1 Pythagoras Solar Wins GE Ecomagination Innovation Award
Pythagoras Solar has been selected as a winner of GE ecomagination Challenge, which recognizes the most promising building energy innovations. Winners were selected from nearly than 5,000 entrants based on originality, feasibility and potential impact. Pythagoras Solar's window technology, an innovation for the real world, revolutionizes the design and construction of buildings, and answers market demand for aesthetically appealing architectural solutions that offer sustainability benefits and fast return on investment. With commercial installations underway, a growing project pipeline and this prestigious award, Pythagoras Solar is well positioned for success in the global marketplace. The Challenge, a collaboration of venture capital firms RockPort Capital, KPCB, Foundation Capital, and Emerald Technology Ventures is part of GE's ecomagination initiative, a global commitment to build innovative clean energy technologies.
Founded in 2007, Petah Tikva's Pythagoras Solar http://www.pythagoras-solar.com is uniquely positioned at the intersection of energy efficient building materials and photovoltaics. The company provides building integrated photovoltaic (BIPV) products that enable the architecture, engineering and construction sectors to design buildings with increased energy efficiency, renewable power generation and appealing aesthetics, thereby increasing real estate value. (Pythagoras Solar 22.06)
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4.2 Energy Technology Ventures Invests in Israeli Wastewater-to-Electricity Company Emefcy
Energy Technology Ventures (a GE, NRG Energy & ConocoPhillips joint venture) is making its first non-US and first water-related investment by providing capital to Caesarea's Emefcy http://www.emefcy.com. Emefcy's technology uses naturally occurring bacteria in an electrogenic bioreactor to treat wastewater. The organic material in the waste produces power and treated water, transforming wastewater treatment from an energy-intensive, cost-intensive and carbon-intensive process, into an energy-generating and carbon-reducing process. The benefits are both economic and environmental: Conventional wastewater treatment uses 2% of global power capacity (80,000 megawatts and 57,000,000 tons per year of carbon dioxide), costing $40 billion per year. Rather than using conventional energy-intensive aerobic processes or methane-producing anaerobic digestion to treat wastewater, Emefcy harvests renewable energy directly from the wastewater and feeds it to the power grid, enabling the energy-positive wastewater treatment plant. The primary initial applications are for wastewater treatment in the food, beverage, pharmaceutical and chemical industries, with total market potential of $10 billion annually. Energy Technology Ventures was joined in the funding round for Emefcy by Pond Venture Partners, Plan B Ventures and Israel Cleantech Ventures. Financial details were not disclosed. (Emefcy 28.06)
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4.3 HelioFocus Reveals HelioBooster
HelioFocus presented its Dish technology – HelioBooster. This technology is physically proven as the most effective way to produce hot air Heat at high temperature (up to 1000 degrees C). HelioFocus system generates steam at a central air to steam heat Exchanger, allowing existing power plant to utilize the supplied high temperature super critical steam and maximize the electricity production at the highest efficiency, minimizing solar field size. Comparing it to other CSP technology, dish technology will reduce the needed project land area (about 30% project land area reduction in comparison to trough technology). The use of Dish technology provides the highest kWh annual electricity energy production per kW installed at stable condition, due to the absolute two dimensional tracking (US south west sites over 2650 kWh/kW). Due to Dish system less sensitivity to slopes, bearable land slope is up to 5% (1% for trough technology). HelioFocus system – the HelioBooster comprises a field of large low cost parabolic dish concentrators (500 sq.m. per dish) that harness temperatures of up to 1000 degrees C. Each dish channels sun radiation onto a proprietary volumetric receiver which generates high temperature air, conducted in a pipe system designed for minimum heat loss and parasitic electricity consumption. The air transferred to a central heat exchanger generates high temperature steam. This steam is delivered to a steam turbine, generating clean electricity. The system is oil free, using pressurized air as HTF (heat transfer fluid), combined with the reduced land use and minimum land slope constrain, provides a true environmental efficient system.
Ness Ziona's HelioFocus http://wwww.heliofocus.com leveraging its strategic alliances, particularly with its investors, Israel Corporation Green (ICG) and China-based Zhejiang Sanhua, to establish its position as a global provider of advanced solar thermal solutions. The company commercialization is scheduled for FY2013 with solar thermal projects in the scale of 10MWe and up in 2-3 different locations. (HelioFocus 30.06)
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5: ARAB STATE & PAKISTANI DEVELOPMENTS
5.1 Lebanon's Consumer Prices See Record May Rise
Lebanon's consumer prices saw their highest May rise on record last month, increasing by 16.2% year-on-year, while inflation rose by 5.6% in the same period, according to figures released by the Central Statistics office. In April, inflation increased by 5.3% year-on-year, while it registered only a 1% increase from the previous month, March. Consumer prices began rising substantially in March, when they recorded a 14.9% year-on-year rise, the highest March increase since records began in January 2007. The figures also show that prices of water, electricity, fuel increased in March by 2.5%, in April by 0.1% and in May by 0.5%. Food prices saw an increase of 0.7% in May and 0.5% in April. Transportation costs decreased in March by 4%, increased by 3.3% in April and in May by 2.2%. (TDS 25.06)
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5.2 Barclays Capital Says Beirut Faces Major Long-Standing Challenges
Barclays Capital said the new Lebanese Cabinet faces long-standing socio-economic and political challenges, but expected it to act more. It added that the unfolding crisis in Syria accelerated the formation of the Lebanese government after five months of stalemate. It said Cabinet's formation constitutes a positive step despite the political risks involved, given the months of policy vacuum and institutional paralysis that seriously undermined political stability and negatively affected private-sector activity, consumer confidence and investor sentiment. As a result, Barclays Capital revised downward its real GDP growth forecast to 3% in 2011 from an earlier projection of 5.3% for the year. The Lebanese government faces long-standing socio-economic and political challenges, but expected it to act more coherently and cohesively than its predecessor in several economic policy areas, at least given its composition. It said the government faces greater public scrutiny about its willingness and ability to deliver on critical policy issues, as opposed to only focusing on “witch-hunting.” It added that taking the latter route risks raising tensions further and increasing political volatility. Barclays considered that the formation of the new Cabinet should bring in principle some positive momentum to the economy following consecutive months of deteriorating activity across various sectors. (Barclays Capital 26.06)
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5.3 Wealth of Middle East's Super-Rich Exceeds $1.7 Trillion
Defying the credit crunch, the Middle East's rich have got richer with only the UAE notching up a decline in its wealthy population, Merrill Lynch's World Wealth Report 2011 said on 22 June. The number of dollar millionaires in the region swelled by 10.4% in 2010, reflecting the fastest growth rate worldwide, to represent 400,000 people sitting on a cash pile of $1.7 trillion. Among the Gulf states, only the UAE saw a slump in its millionaires' club, a decline attributed to the collapse of Dubai's real estate market, which wiped more than 60% off house prices. Across the Arab Middle East, holdings of real estate among high-net-worth players fell to 18% of all investments from 23% in 2009 as property markets saw a slump in demand.
Merrill Lynch Wealth Management said the region's growth had been driven by rising oil prices and a rise in global equity market capitalization. One key differentiating factor for the region is the significantly high ratio of savings to GDP. The ratio was as high as 54% in Bahrain and 40% in Saudi Arabia, compared to single-digit rates in developed countries such as the United States. High levels of disposable cash also meant the region's rich invested in the global equities markets, which produced strong returns last year. Private equity investments, which grew by an average of 18% in 2010, comprised 17% of overall investment by Middle East millionaires compared to 10% globally.
Sports investments, while only accounting for 8% of investments globally, were popular for 13% of Middle East millionaires. However, the region's rich cut their spending on jewelry, gems and watches to 29% last year, down from 35% in 2009. Kuwait and Bahrain saw their share of high-net-worth players jump by 25 and 24% respectively, placing them sixth and seventh in the rankings of 71 countries, the report said. The UAE saw a 3.5% decline in dollar millionaires. The GDP in the OPEC member grew at 2.1% in 2010, compared to 4.2% in Bahrain and 3.8% in Saudi Arabia. Saving levels in the UAE hit 32.3%, the report found: high by global standards, but still below Bahrain (54%) and Saudi Arabia (40.1%). (AB 22.06)
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5.4 Jordan Receives Nuclear Reactor Bids
On 30 June, Jordanian energy officials accepted bids for the construction of the country's first nuclear reactor. Jordan accepted bids from three short-listed energy companies -Russian Atomstroy Export, Canadian AECL in association with French firm AREVA and Japanese Mitsubishi Heavy Industries- to construct a 1,000 MW Generation III reactor by 2020. According to the Jordan Atomic Energy Commission, a ministerial committee will start reviewing the bids in mid-July, before announcing the winning firm in December 2011. (Beltone 03.07)
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5.5 High Cost Of Living Plagues Jordanians
High inflation rate at 4.6% during the first five months of this year and 5.3% in 2010 is burdening Jordanian households. As inflation is expected to rise due to the increase of prices on the international level, coupled with harmful domestic practices, middle and even high class housewives charge that prices in Jordan have become more expensive than in other world countries. Some 60% of the inflation is caused by the increase of prices on the international level, especially of fuel and food items, while the remaining 40% is the result of adverse domestic practices. Pundits say that domestic monopoly practices and government duties, including different taxes and customs, levied on goods are the main factors behind the inflation. Also, collusive practices between some importers and traders contribute to price increases, he said, noting that it is not easy to track down such suspected collusive price-hiking practices. According to a February report by the National Inflation Association, the decline of the US dollar helped export America's inflation to the rest of the world, mainly North Africa and Middle East region. As prices continue to rise, workers in both the public and private sector have become increasingly vocal in demanding higher salaries. This has become evident throughout the demonstrations held across Jordan through the past weeks. (JT 28.06)
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5.6 Kuwait Approves Record Budget With Deficit
Kuwait's parliament on 29 June passed a deficit budget for FY 2011/12 projecting the highest spending in the OPEC member's history amid warnings the country's future is at risk. Thirty-nine MPs voted for the budget while 20 were opposed. Spending is projected at 19.44 billion dinars ($70.7 billion), an 11% rise from the previous budget, mostly to meet a string of pay hikes and grants for Kuwaitis. The previous largest spending was 18.7 billion dinars in 2008-2009 when oil prices hit an all-time record above $147 a barrel. That budget included a one-off payment of 5.5 billion dinars for the pension agency. Revenues are estimated at 13.45 billion dinars, more than 90% from oil, a sharp 38% increase from last fiscal year after raising the oil price in the budget from $43 to $60 dollars a barrel. That leaves a deficit of 6 billion dinars, but the oil-rich emirate projected a deficit in the past 12 fiscal years and ended up in surplus mainly for underestimating oil income. During that period, Kuwait has accumulated about $200 billion in budget surpluses and is also expected to end up the current year in the black if oil prices remain high. Kuwait's fiscal year starts on April 1 and ends on March 31. Kuwait says it holds 10% of global crude reserves and is pumping about 2.6 million barrels per day. (BI-ME 29.06)
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5.7 Kuwait's Inflation Increases to a To Five-Month High
Kuwait's annual inflation has risen to a five-month high of 5.4% in May, the highest level among Gulf Arab oil producers, and living costs in nearby Qatar rose slightly to match March's reading, data showed. Inflation in the Arabian Gulf was expected to creep higher this year on robust global commodity prices, a weak dollar and increased government spending following unrest in the Arab world. However, slow lending growth and ongoing weakness in the property sector in some of the countries are seen keeping consumer price growth well below record, double-digit peaks seen in most Gulf states in 2008, despite oil prices staying above $90 per barrel now. In Kuwait, the world's No. 4 oil exporter, inflation has been hovering above 5% since the beginning of this year. It stood at 5.3% in April, after climbing to a nearly two-year peak of 6% in December. For May, consumer prices in Kuwait grew 0.3% in May, up from a 0.2% rise in the previous month, as food costs rose sharply for the third month in a row. The May inflation figure comes within the Kuwait central bank's 5 - 6% forecast from March. Central banks in the Gulf, which needs to import most of its food needs, have limited tools to combat price pressures as most of the region's currencies are linked to the dollar. In Qatar, whose economy is powering ahead at a double-digit clip, inflation was also slightly higher in May, at 1.7% year on year and 0.2% on the month, compared with April. (AB 26.06)
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5.8 May's Prices in Qatar Rise for Seventh Consecutive Month
Qatar recorded a seventh-straight rise in consumer prices in May with inflation expanding 1.7% amid higher clothing and transportation costs. The Gulf country's consumer price index increased to 108.2 from 107 a year earlier, the national statistics office said. Prices of clothes and shoes rose 7.8% while transport costs increased 5.2%. The cost of housing was the only area where prices fell, dropping 3.8%. Consumer prices began to rise in November after falling for the first 10 months of 2010 amid double-digit economic expansion. Consumer prices rose 0.2% compared with April, the statistics office said. (AB 26.06)
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5.9 Dubai Exports & Re-Exports Hit Three-Year High in May
Dubai exports and re-exports hit a three-year high of AED22bn ($5.9bn) in May. The Dubai Chamber of Commerce & Industry said latest data showed that the performance was 26% higher than in the same month last year. The value of Chamber members' export and re-exports for the first five months of 2011 reached AED100bn. This is a 17.6% increase compared to AED85bn registered for the same period in 2010. The emirate's trade and business hub is recovering from last year's $25bn debt restructuring in its flagship company, Dubai World, after its 2009 standstill sent global markets reeling. (AB 22.06)
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5.10 Dubai First Quarter Direct Trade Jumps By 34%
Dubai's direct trade soared by 34% in the first quarter to $49.8 billion, customs data showed, but it may weaken in coming months on a slowdown in China and the US. Exports jumped by 47% year-on-year in the first three months of the year to AED22 billion while re-exports rose 44% year-on-year to AED49 billion. Imports in Dubai, which account for nearly a third of the UAE's gross domestic product, climbed 28%. One of the seven United Arab Emirates, the OPEC producer's trade and business hub is recovering from last year's $25 billion debt restructuring in its flagship company Dubai World. Dubai's economy should grow 2.8% this year, the IMF forecasts, up from 0.5% in 2010. India was Dubai's largest trade partner in the first quarter followed by China and the US. (Bi-ME 28.06)
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5.11 Tourism to Contribute $1.93 Billion to Oman's GDP
Oman's tourism sector is expected to contribute $1.93 billion, or around 3%, of the country's GNP in 2011, according to a recent report by the World Travel and Tourism Council (WTTC). The report also revealed that by 2021 Oman's travel and tourism industry is expected to directly support over 50,000 jobs and that travel and tourism investment will contribute 6% of the country's total investment. This growth will be fostered by a new $1-billion Oman Conference and Exhibition Centre in Muscat. The Meetings, Incentives, Conferencing, Exhibitions (MICE) venue is scheduled for completion in 2014 and is expected to transform Oman into a key destination for major business events. Oman has already approved the spending of around $8 billion on tourism-related property developments across the country with the Ministry of Tourism aiming to draw in around 12 million visitors a year by 2020. Tourism related activity during this time is expected to contribute 9.2% of the economy's GDP. (GN 28.06)
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5.12 Trade Between Egypt & US Increases by 10.4%
Trade exchange between Egypt and the United Sates increased by 10.4% between January and April, compared to the same period in 2010. The Egyptian trade attaché in Washington said trade reached $3,303,200,000 this year, compared to $2,990,500,000 in 2010. Egyptian non-petroleum exports to the US between January and April reached $577.1 million, compared to $477.6 during the same period last year. The Qualifying Industrial Zones exports declined to $317.1 million this year, compared to $343.6 million in 2010. Egyptian imports from the US, however, reached $2,622,500,000 this year compared to $2,061,300,000 during the same period in 2010. Egypt ranked 33rd among the highest exporters to the US from January to April 2011. Egypt ranked the first among African countries and the third among Arab countries, following Saudi Arabia and the United Arab Emirates. The spike in Egyptian imports was attributed to increases of $149 million in wheat, $32 million in soy beans, $27 million in coal and a $22 million increase in scrap metal imports. (IMIY 28.06)
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5.13 Egypt Not To Borrow From IMF & World Bank as Cairo Lowers Expenditure Plans
Egypt will not borrow from the International Monetary Fund and the World Bank after revising its budget and cutting the forecast deficit, even though a loan had been agreed upon, Finance Minister Samir Radwan said, Reuters reported. The FY2011/12 deficit in the first draft budget was forecast at 11% of GDP, but was revised to 8.6% of GDP as a result of a national dialogue and because of concerns by the ruling army council over increasing debt levels. Despite the budget revisions, the government said it still expected growth of 3.0 - 3.5%, in line with previous forecasts. Egypt this month had agreed on a $3 billion, 12-month standby loan facility from the IMF, which the Ministry of Finance had said came with more lenient terms than usually associated with such lending. An IMF spokesman confirmed that Egypt has scrapped plans for the loan program. Egypt's cabinet had approved on 1 June a budget for 2011/12 that increased spending by a quarter to create jobs and help the poor. That was revised and a new draft was announced on 22 June. In the latest budget, the government sees spending up 14.7% at E£490.6 billion, down from an estimate of E£514.5 billion in the previous budget. Eurobonds as financing tools are not ruled out as an option; however, no specific plans were announced. Fuel subsidies for industries will be reduced, while food and fuel subsidies for the poor will not be touched. The E£99 billion allocated to fuel subsidies in the initial FY11/12 budget will be reduced by E£7.5 billion. In a bid to help industries cope with the change, Radwan said the government would help brick-making factories switch from diesel to natural gas and would, then remove the fuel subsidy. Extra revenue would also come from revising gas export prices, where revisions had already been agreed upon with Jordan and Spain. (Beltone 26.06)
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5.14 Egypt Narrows Target Budget Deficit to 8.6% of GDP from Previous 11%
The Egyptian Ministry of Finance narrowed its target budget deficit to 8.6% of GDP from a previous 11% of GDP by cutting expenditure. The government sees spending up 14.7% y-o-y at E£490.6 billion in FY11/12 down from an estimate of E£514.5 billion. The canceled capital gains tax had reduced revenue sources, and therefore the government had to resort to cutting expenditure. The cuts included a reduction in energy subsidies to E£95.5 billion from E£99 billion. With the new target budget deficit of 8.6% of GDP, the government plans to rely less on financing from abroad. The interim government had sought $9.5 billion in budget support from international sources and has already secured $3.5 billion from the IMF, $2 billion from the World Bank with plans of the loan reaching $4.5 billion and other bilateral aid packages from Saudi Arabia and the US. The Minister of Finance confirmed that the decision to cap expenditure had nothing to do with the IMF and that it is a purely an Egyptian decision. The government is still in negotiations to receive financial aid from Gulf Arab countries, the European Union and the United States totaling some E£14.3 billion ($2.41 billion). In addition to the planned external financing, the government plans to issue bonds worth E£47 billion to finance infrastructure projects. The government still sees state revenues growing 19% to E£349.6 billion, boosted partly by higher petroleum and Suez Canal revenues and a rise in cigarette tax and income tax on the rich. The new changes to the budget are still to be approved by the military council. (Beltone 23.06)
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5.15 US to Cancel One-Third of Egypt's Debt Over Three Years
The United States has agreed to cancel one-third of Egypt's debts over the course of three years, Finance Minister Radwan said. Egypt owes the United States approximately $3 billion and instead of repaying the debt, Egypt would use the funds to finance a number of development projects that are still under discussion. President Obama had announced in May 2011 that the United States planned to relieve $1 billion in Egyptian debts and guarantee another $1 billion in borrowing by Egypt to support its economy. (Beltone 03.07)
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5.16 Egypt Signs MOU for $900 million in Economic Aid from Saudi Arabia
Egypt's government said it had signed a memorandum of understanding for $900 million in economic aid from the Saudi Fund for Development, Bloomberg reported. Egypt will receive $500 million in loans for development projects at 2% annual interest over 20 years, with a five-year grace period, the Cabinet announced. Egypt will also receive a $200 million grant for small and medium businesses, $150 million in loans to be used to import non-hydrocarbon Saudi Arabian products and a $50 million loan for a power station in Benha, Egypt. (Beltone 22.06)
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5.17 Egyptian Internet Subscribers Increase by 170,000 Subscribers in March 2011
The number of internet subscribers increased by 170,000 subscribers during March 2011, to reach 24.15 million users by the end of the month, growing by 0.7% m-o-m and 38.5% y-o-y, Al Mal newspaper reported. Mobile internet subscribers plunged to 8.19 million by the end of March 2011 (11.1% of total mobile subscribers and 33.9% of total internet users), falling by 2.3% m-o-m and increasing by 90.3% y-o-y, according to a report published by the Ministry of Telecommunications and Information Technology, in cooperation with Telecom Egypt. The number of USB Modem internet subscribers, on the other hand, went up to 1.78 million users, increasing by 6.68% m-o-m and 177.82% y-o-y. The number of ADSL (broadband) subscribers reached 1.49 million, up by 3.2% m-o-m and 34.7% y-o-y. In terms of internet services' market share, mobile internet and USB Modem dominated, with a market share of 41%, followed by ADSL with 34%, ISDN and dial-up with 13%, and leased line users with 12% of the internet market share. The number of fixed line subscribers declined to 9.7 million, down marginally by 0.02% m-o-m, 91% of which were represented by household subscribers, followed by 7% in commercial users, and 2% in governmental users. (MTIT 29.06)
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5.18 Algeria's Trade Surplus Rose To $10.3 Billion In 5 Months
Algeria has achieved a trade surplus of $10.39 billion between January and May 2011, against $8.2 billion during the same period in 2010. Exports totaled $29.46 billion during these five months, against $25.09 billion during the same period of the previous year, up 17.42%, according to preliminary figures from the Customs National Centre of information and statistics (CNIS) cited by the APS. As for imports, they reached $19.08 billion against $16.89 billion, an increase of 12.90%. The improvement in foreign trade due to an increase of over 17% of the value of oil exports that have nearly flamed in the first months of 2011 particularly because of the Libyan crisis. (APS 30.06)
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5.19 Morocco Agribusiness Report Q3 2011
Research and Markets http://www.researchandmarkets.com "Morocco Agribusiness Report Q3 2011" says given its relative importance to Morocco's economy, agriculture will continue to benefit from substantial levels of investment. In December 2010, Morocco signed a MAD780mn ($93mn) financing agreement with the EU to support Moroccan agricultural sector policy. The investment will help back the implementation of the Green Morocco Plan, a package of reforms targeted specifically at rural areas. The program aims to gradually improve the bovine meat, date palm and olive grove sectors, along with other products including local truffles.
BMI maintains its view that Morocco's livestock industry - especially the poultry and beef sectors - also offers considerable opportunity for further investment and development. In recent years, livestock production has already benefited from increased investment as producers look to address growing demand. Demand for poultry has been notably high, with consumption growth reflecting an expanding population and rising GDP per capita. A growing number of fast food outlets are also boosting demand for processed meats. Although demand for poultry and beef will partially be met through imports, domestic production also stands to benefit.
Value-added dairy products are also seen as offering opportunities for investment. Over the next few years, demand for cheese, butter and yoghurt in particular is expected to show strong growth. Average annual milk yields are low in Morocco, highlighting investment opportunities in improving dairy production efficiency. Meanwhile, despite concerns about the rising price of major commodities, BMI believes that government interventions in the form of subsidies and stockpiling should help to ensure that consumption demand for basic food products remains steady. In February 2011, Morocco's Prime Minister met with majority and opposition party leaders to discuss ways to tackle rising living costs. Following these meetings, the government revealed that it would add $1.8bn to the budget for food and energy in order to reduce the impact of rising basic commodity prices on consumers. (R&M 04.07)
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5.20 Pakistan's Fuel Scarcity & Unpaid Bills Shutter 12 Power Plants
Pakistan's endemic power crisis has reached a new level, with ongoing fuel scarcities and unpaid bills leading to the temporary closure of 12 of the country's power plants. During the dispute over unpaid bills and oil fuel shortages several power plants have discontinued supplying electricity to Pakistan Electric Power Company (PEPCO) while Sui Northern systems has also been beset by technical problems, resulting in the shutdown of five power plants. Independent power producers (IPPs) have stopped providing power to PEPCO due to its failure to pay its bills in a timely manner, a problem exacerbated by shortages of oil and natural gas needed to power the plants, resulting in the shutdown of five power plants that were collectively producing 1,450 MW of electricity. Pakistan's electricity shortage has now reached 4,760 MW, as the country's power plants are currently generating 13,240 MW while demand is 18,000 MW. In Lahore, the city is now facing a daily power outages of 10-12 hours while in Karachi, Pakistan's largest city, the blackouts now extend up to 10 hours, with power cuts also producing acute water shortages. In the rural countryside the situation is even worse, with blackouts now lasting up to 16 hours a day. (OilPrice.com 22.06)
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6: TURKISH, CYPRIOT, GREEK & BULGARIAN DEVELOPMENTS
6.1 Turkey's Inflation Slows To Annual 6.24% In June
Turkey's consumer price index (CPI) fell 1.43% month-on-month in June, compared with a forecast fall of 0.75%, for a year-on-year rise of 6.24%, the Turkish Statistics Institute (TurkStat) has said. However, the producer price index (PPI) rose 0.01% in June, making the annual inflation of PPI 10.19%. The index for transportation recorded the highest increase at 9.50%, compared with the same month of the previous year. It was followed by other indices where high increases were experienced in areas such as miscellaneous goods and services (7.59%); food and non-alcoholic beverages (8.13%); furnishings and household equipment (7.59%); and hotels, cafes and restaurants (7.50%). The PPI data showed that the highest increase in producer prices occurred in the basic metal industry with 4.95%. This was followed by communication equipment (3.22%), and medical equipment (2.22%). However, oil and natural gas extraction (-5.63%), food and beverages (-0.62%), machinery and equipment (-0.24%) were the sectors with the highest price falls in June. (TurkStat 04.07)
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6.2 Turkey to Implement Additional Tariffs on Certain Fabric & Apparel Imports
On March 24, 2011, the Turkish Council of Ministers' approval for the implementation of provisional customs tariffs on imports of certain woven fabrics and certain apparel and apparel accessories was published in the Official Gazette. Consequently, on 21 July these tariff increases come into effect. Imports originating in the U.S. would be subject to additional tariffs of 20% on designated woven fabrics and 30% on designated apparel and apparel accessories. Per unit value minimum and maximum tariff thresholds are also listed. At implementation, importers will be obliged to pay the provisional customs tariffs. In the unlikely event that further investigation finds that the tariff has not assisted Turkish manufacturers, it may then be rescinded.
This so-called “safeguard measure” should not be effect for over 4 years, including the period during which any provisional measures were taken. Initial safeguard measures can be extended if at the end of the initial period it is determined that conditions threatening the market still exist. An extension would require another safeguard investigation, but any follow-on safeguard measures would have to be less restrictive than the initial measures. The total implementation period, including one or more extensions, cannot exceed 10 years. The U.S. Government is monitoring this issue and has registered as an interested party to the investigations. (DoC 23.06)
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6.3 Israeli Tourist Numbers to Turkey Cut In Half In 2011
The number of Israeli tourists visiting Turkey between January and May this year decreased by about 59% compared to the same period last year, according to data published by the Turkish Tourism Ministry. The figure stands in stark contrast to last year, when figures showed a 133% increase over the same time period in 2009. About 30,000 tourists from Israel visited Turkey in the first five months of the year, compared to the 72,500 Israeli tourists who came to Turkey during the same period in 2010. The decrease was even sharper for May, when only 6,417 tourists from Israel came to Turkey, compared to 18,295 in the same month last year. Turkey's relationship with Israel has been strained since the 31 May 2010 halting of Turkish Islamist ship by Israel from landing in the Gaza Strip. Diplomatic tension, however, has not hampered mutual trade between the two countries, with trade between Israel and Turkey increasing by 25% between 2009 and 2010 and by 40% in Q1/11 compared to the same period last year. Bilateral trade by the end of last year peaked at $3.44 billion, up from $2.58 billion in 2009.
Meanwhile, the total number of foreign tourists visiting Turkey during the January-May period hit 9 million, marking a 14.56% increase compared to the same period last year, according to data recently published by the ministry on its official website. Some 3.3 million foreign tourists visited the country just in May, marking a 4.28% increase compared to May 2010. About 235,000 foreign tourists that visited Turkey in May, accounting for 7.15% of the total, were day trippers, according to the data. (Hurriyet 28.06)
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6.4 US Company to Begin Drilling in Cyprus Offshore Waters by Year End
The U.S. based company Noble Energy is to begin exploring Cyprus' offshore Mediterranean Exclusive Economic Zone (EEZ) by the end of 2011. In October 2008 Noble Energy' received an offshore concession from the Cypriot government to explore its designated Block 12 for possible hydrocarbon reserves in Cyprus' EEZ. The concession borders Israel's “Leviathan” offshore block in Israel's Mediterranean EEZ. The issue of hydrocarbon exploration in the eastern Mediterranean is frequently contentious, as a number of nations have overlapping claims. (OilPrice.com 24.06)
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6.5 Greece Avoids Insolvency by Passing Austerity Package
The Greek parliament on 29 June passed a vital €28b austerity package, allowing the country to avoid immediate insolvency. Efforts to come up with a vast new bailout for Athens have also made progress. With 155 out of 300 parliamentarians voting yes, with 7 abstentions, to the €28 billion ($40 billion) package of spending cuts and tax increases over the next five years, the Papandreou government got the simple majority it needed. A second bill, related to the implementation of the cuts outlined also passed. The total austerity program, comprising €50 billion in privatizations and €28 billion in budget cuts, has long since become a concern not just for Greece, but for the global financial system. The governor of the Greek central bank stressed the crucial nature of today's vote, saying that "failure to approve the program will amount to suicide." According to recent polls, 80% of Greeks oppose the program.
The passage of the belt-tightening measures was a critical step for Greece to avoid immediate insolvency. The European Union had made passage of the package of laws a condition for the release of the next €12 billion tranche from the €110 billion Greek bailout package passed last year. Without that money, Greece would have defaulted on its debt by mid-July. Still, despite the high stakes, much of the conservative opposition rejected the bill.
The EU and the IMF are also in the process of negotiating a second bailout package for Greece, the value of which could be as high as €120 billion. Talks on the package have been slow, with Germany insisting that private investors be involved in any bailout plan. Others have been concerned that forcing investors to renounce part of their claims could be viewed as a default by ratings agencies, leading to further downgrades. That, in turn, could severely worsen the already dire crisis facing Greece. (CGH 29.06)
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6.6 Bulgaria's Annual Inflation Rate Reaches 5.6%
Bulgaria's annual inflation rate reached 5.6% in March 2011, according to the country's National Statistical Institute's consumer price index (CPI). The consumer price index in March 2011 compared to February 2011 was 100.6%, i.e. the monthly inflation was 0.6%. The inflation rate since the beginning of the year (March 2011 compared to December 2010) was 2.4%. The annual average inflation, measured by CPI, in the last 12 months (April 2010 - March 2011) compared to the previous 12 months (April 2009 - March 2010) was 3.5%. The harmonized index of consumer prices (HICP) in March 2011 compared to March 2010, i.e. the annual inflation, was 4.6%, while the monthly inflation in March 2011 compared to February 2011 was 0.4%. The inflation rate since the beginning of the year (March 2011 compared to December 2010) was 1.4%. The annual average inflation, measured by HICP, in the last 12 months (April 2010 - March 2011) compared to the previous 12 months (April 2009 - March 2010) was 3.7%. The consumer price index (CPI) is the official measure of inflation in Bulgaria. The Harmonized Index of Consumer Prices (HICP) is the comparable measure of inflation across EU member states. HICP is one of the criterions of price stability and for readiness of Bulgaria to join the euro-zone. (SMN 13.04)
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6.7 Bulgaria's New Car Market Starts To Improve in First Quarter
The market of new cars in Bulgaria has registered a modest but nonetheless tangible year-on-year growth in the first quarter of 2011. A total of 4,638 new cars were sold in Bulgaria in January-March 2011 vs. 3,956 sales in the same period of 2010, a growth of 17%, according to data of the Association of Car Importers. In March, a total of 1,816 new cars were sold, compared to 1,358 in February and 1,464 in January. Bulgaria's all time record first quarter in terms of new car sales was in 2008 when a total of 15 224 new cars were sold in the country, just months before the economy got into a depression and the market collapsed. The total number of vehicles, including cars, trucks, buses, and motorcycles, sold in the first quarter of the year is 4,888 vs. 4,116 in Q1/10. The most popular brand in Q1/11 in Bulgaria was Volkswagen with 567 new car sales, followed by Toyota with 427 sold vehicles. Ford is third with 414 sales, Peugeot comes in fourth with 369 sales, followed by Dacia with 357 and Skoda with 302. Mercedes is the leader in the sales of new buses and trucks – a total of 45 in the first quarter. Peugeot has the lead in the sales of new motorcycles – 42, or 67% of all motorcycles sold in Bulgaria in this period. (SMN 13.04)
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7: GENERAL NEWS AND INTEREST
*ISRAEL:
7.1 Jewish-Druze Celebration Planned
A unique religious event will be held in northern Israel next week: a joint Jewish-Druze celebration. It will be held in the Druze town of Sajur in the Galilee region, in honor of the anniversary of the death of Rabbi Ishmael ben Elisha, who was considered a righteous man both among the Druze and the Jews. Rabbi Ishmael ben Elisha was a high priest in the last days of the Second Temple and one of the Ten Martyrs – a group of rabbis executed by the Romans, which included Rabban Shimon ben Gamliel. (Ynet 01.07)
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7.2 17th of Tammuz Fast Day
The Jewish fast day of the 17th of Tammuz is observed this year from sunup to evening on Tuesday, 19 July. The fast day itself commemorates five tragedies: 1. Moses descended from meeting G-d and receiving the Torah on Mount Sinai, saw the Jews celebrating with the Golden Calf and broke the two tablets G-d had given him. 2. The daily offering, which had been brought regularly in Temple in Jerusalem, was halted during the Babylonian siege before the Temple was destroyed. 3. The Romans breached the walls of Jerusalem, prior to destroying the second Temple, in 70 CE. 4. A Greek or Roman official named Apostimos held a public burning of the Torah. 5. Idols were set up in the Temple itself; it is not clear what year this happened. The 17th of Tammuz is the second of the four fasts commemorating the destruction of the Temple and the Jewish exile.
In later years this day continued to be a dark one for Jews. In 1391, more than 4,000 Jews were killed in Toledo and Jaen, Spain and in 1559 the Jewish Quarter of Prague was burned and looted. The Kovno ghetto was liquidated on this day in 1944 and in 1970 Libya ordered the confiscation of Jewish property.
The 17th of Tammuz also marks the beginning of the “Three Weeks,” which ends with the fast of the 9th of Av. Some customs of mourning, which commemorate the destruction of Jerusalem, are observed from the start of the Three Weeks. Jewish mourning customs restricts the extent to which one may take a haircut, shave or listen to music, though communities and individuals vary their levels of observance of these customs. No Jewish marriages or other major celebrations are allowed during the Three Weeks, since the joy of such an event would conflict with the expected mood of mourning during this time. The Three Weeks can be thought of as having a variety of increasing levels of mourning. Some restrictions begin on the 17th of Tammuz, some from the beginning of the month of Av, and some only come into effect the week in which Tisha B'Av occurs.
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7.3 IDF's 1st Female Major-General Takes Charge
On 21 June, Orna Barbivai was officially promoted to the rank of major-general at a ceremony at the IDF headquarters in Tel Aviv. She is the first woman in the history of the IDF to receive the honor. In a second ceremony that took place later that day at the Bahad 1 base, the outgoing head of the IDF's Personnel Directorate, Major-General Zamir, handed over the command over the division to Barbivai. Barbivai promised to preserve the equality in IDF recruitment. (Various 23.06)
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7.4 Labrador Most Popular Dog in Israel
More than 387,289 dogs are currently registered on the website of the Agriculture Ministry's National Dog Register, which has released some figures on canines in Israel. According to the data, Israelis prefer adopting a male, purebred dog rather than a mixed breed. Since the establishment of the National Dog Register about five years ago, 438,586 dogs have been updated on the website, but the Agriculture Ministry recently began deleting the listing of more than 50,000 dogs born after 1994, as dogs' estimated life expectancy is about 17 years. According to the ministry, most dog owners fail to update the Register when their dog dies. There are currently 195,592 male dogs registered, compared to 191,697 female dogs. Since the beginning of 2010, 50,768 new dogs were registered – 14,657 of them born in the past year. According to the Agriculture Ministry, only 46,942 of male dogs in Israel have undergone castration, compared to 116,935 of female dogs which have been spayed (24% of male dogs compared to 61% of female dogs).
This is the fourth year that the name Lady is considered the favorite name for female dogs (3,098 dogs), while this year the name Lucky (2,734) leads the list of most popular names for male dogs, after defeating the name "Bonnie", which still remains very popular (2,699). More unique names include Red Bull, Kinor (Hebrew for "violin"), Nautika, Abu Ali and Escape.
For the third time in a row, the Labrador Retriever has been named the most popular purebred dog in Israel, with 20,490 registered dogs. The Pinscher came in second for the second year with 17,881 registered dogs. They are followed by the German Shepherd with 13,848 dogs. The Pekingese is fourth with 15,544 dogs and the Golden Retriever seals the top five with 13,093 dogs. According to the ministry figures, the Pekingese dog breed leads the list for the second year in a row in terms of the number of purebred dogs who have joined the reservoir with 2,222 dogs compared to the Labrador with 2,074 dogs. (Ynet 26.06)
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*REGIONAL:
7.5 Jordan's PM Announces Cabinet Reshuffle
Jordanian Prime Minister Bakhit announced a cabinet reshuffle on 2 July, following resignations of three ministers over a corruption scandal. The Finance and Foreign Ministers have remained unchanged while Mazen al-Saket, who used to head the civil service, was appointed the new Minister of Interior. A reshuffle was forced in May 2011, with resignations of the ministers of health and justice due to a corruption case. Proposals by Bakhit's government to restrict online media also pushed Information Minister Taher Adwan to resign in June 2011. (Beltone 03.07)
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7.6 Egypt's Mubarak Misappropriated $185 Billion of Foreign Aid
A recent study by the Economic Research Center said deposed Egyptian President Mubarak misappropriated $185 billion – or 87% – of the total $213 billion that Egypt received in foreign aid from 1982 until 2010. The study said that the United States gave Egypt $63.5 billion, Japan $32 billion, Saudi Arabia $25 billion and the United Arab Emirates $20 billion, in addition to a number of other countries. The study was based on reports from the Ministry of International Cooperation, the Central Auditing Organization and the Council of Ministers at the time of prime ministers Ebeid and Nazif. A large part of that aid was paid in salaries of Egyptian and foreign consultants, and in decorating the offices of the ministers. (IMIY 16.06)
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7.7 43% Of Egyptians Do Not Know Their Prime Minister's Name
A survey by the Cabinet Information and Decision Support Center has revealed that 43% of Egyptians do not know that Essam Sharaf is the prime minister, against 57% who do. A previous survey by the same center revealed that only 48% knew of Ahmed Nazif, the former prime minister. The new survey also reveals views on the future president. 29% of the sample wants him to be an honest man, 39% say he should be close to the people and attend to their problems, 17% say he should be conscientious, 8% say he should be firm and 5% say he should be a respectable man. The survey also reveals that 59% believe religion does not allow women to become president because they are too emotional, and that it would be against Egyptian customs and traditions. Also according to the survey, 67% are in favor of keeping the peace treaty with Israel, 11% call for its cancellation, 20% are undecided, while 2% think that it should be amended. On elections, 28% participated in the 2010 parliamentary elections, while 77% said they would participate in this year's elections, 18% participated in the 2005 presidential elections, and 87% said they would participate in the next ones. On political parties, 1% says they already belong to a party, while 12% say they intend to join a party in future. (IMIY 28.06)
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7.8 Moroccans Approve Draft Constitution
Moroccans approved a draft constitution, drawn up at the orders of King Mohammed VI, that the government said would bring long-awaited democratic changes to the North African nation. The proposal was supported in a nationwide referendum yesterday by more than 98% of voters. More than 72% of the country's 13 million voters participated, Interior Minister Cherkaoui said. Under the plan, the prime minister would be chosen from the party that wins elections and the king would retain the power to overrule or dissolve parliament, along with his role as “commander of the faithful” in the Islamic country. The constitution was drawn up at King Mohammed's orders in response to pro-democracy protests that echoed the uprisings in Tunisia and Egypt. Hundreds of thousands of people took to the streets to support the draft, calling it a step toward democratization. There were also demonstrations against it, with critics objecting to the fact that the drafting committee was appointed by the king and saying the changes don't go far enough. Demonstrations against corruption and the monarchy's powers began in February, prompting the king to promise more liberties.
Morocco's $80 billion economy may expand almost 5% this year, according to government forecasts. Tourism accounts for almost 10% of gross domestic product in the nation of 33 million. King Mohammed VI is the North African country's secular and religious leader. The proposed changes also include allowing Moroccans to vote abroad, and making Amazigh, spoken by the Berber ethnic community, an official language alongside Arabic. While Islam would continue to be the state religion, freedom of worship would be guaranteed. (BI-ME 02.07)
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7.9 Turkish Parliament Sworn In Despite 170 Deputies Missing
The 24th Parliament of Turkey convened in Ankara for the swearing-in ceremony on 28 June, though 170 deputies out of 550 declined to take the oath and officially join the assembly. the sole deputy from the main opposition Republican People's Party (CHP) who took the oath did so because he was the oldest member of Parliament and will chair the general assembly until a parliamentary speaker is elected. The new MPs took the oath without 170 deputies, as CHP leader Kiliçdaroglu announced earlier in the day that the main opposition deputies would attend the opening session but not appear at the chair to swear in, in a move to protest the decision to not release CHP deputies journalist Mustafa Balbay and academic Mehmet Haberal, who were elected but have been detained for more than two years on charges of involvement in alleged plots to destabilize and overthrow the AKP. Also, independent deputies, who were backed by Peace and Democracy Party, or BDP, and won 36 seats in the 12 June elections, boycotted Parliament after Turkey's Supreme Election Board barred Hatip Dicle from using his legislative rights due to a past conviction for spreading propaganda for the outlawed Kurdistan Workers' Party, or PKK. The remaining 35 independent deputies did not participate in the oath ceremony either. Taking the CHP and BDP together, more than 30% of the candidates elected in the 12 June vote boycotted the oath ceremony. Defying a 2007 precedent, the Supreme Election Board last week refused to free nine opposition candidates elected while awaiting trial in prison. (Hurriyet 28.06)
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8: ISRAEL LIFE SCIENCE NEWS
8.1 BioLineRx & Yissum Deal for Treatment BL-7040 for Inflammatory Bowel Disease
BioLineRx and Yissum Research Development Company, the Technology Transfer Company of the Hebrew University of Jerusalem, have signed a worldwide, exclusive license agreement for BioLineRx to develop and commercialize BL-7040, an orally available Phase II ready molecule for treating Inflammatory Bowel Disease (IBD) and other inflammatory diseases. BL-7040 has dual activity on both the nervous and immune systems, rendering it highly suitable for treating both neurological diseases and immune system related conditions such as inflammatory or autoimmune diseases. BL-7040 was previously developed for Myasthenia Gravis (MG), a neuromuscular disease, where it showed a high level of efficacy in Phase Ib and IIa clinical trials. However, after discovering a new mechanism of action for the drug, BioLineRx is designating BL-7040 for IBD and other inflammatory diseases with a much wider market. BL-7040 possesses anti-inflammatory properties, as shown in preclinical studies. In these studies, BL-7040 led to amelioration of parameters associated with inflammatory bowel disease, an inflammatory gastrointestinal tract disorder. The efficacy of BL-7040 in these studies was shown to be highly significant and comparable to that of dexamethasone, a steroid used routinely for IBD that has multiple side effects.
Jerusalem's BioLineRx http://www.biolinerx.com, a publicly-traded biopharmaceutical development company, is dedicated to building a portfolio of products for unmet medical needs or with advantages over currently available therapies. BioLineRx' current portfolio consists of five clinical stage candidates. BioLineRx has nine products in various pre-clinical development stages for a variety of indications, including central nervous system diseases, oncology, infectious diseases, cardiovascular and autoimmune diseases. BioLineRx' business model is based on acquiring molecules mainly from biotechnological incubators and academic institutions.
Yissum Research Development Company of the Hebrew University of Jerusalem http://www.yissum.co.il was founded in 1964 to protect and commercialize the Hebrew University's intellectual property. Ranked among the top technology transfer companies in the world, Yissum has registered over 7,000 patents covering 2,023 inventions; has licensed out 530 technologies and has spun-off 72 companies. Products that are based on Hebrew University technologies and were commercialized by Yissum generate today over $2 billion in annual sales. (BioLineRx 27.06)
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8.2 Rosetta Genomics & UC Davis Develop microRNA Biomarker for Bladder Cancer Treatment
Rosetta Genomics has entered into a collaboration with the University of California, Davis to develop and validate a microRNA profile for muscle-invasive bladder cancer (MI-BC) that is predictive of patient response to neoadjuvant chemotherapy. The collaboration allows for UC Davis researchers to continue using Rosetta's platforms and microRNAs to further discover new biomarkers and validate their results. Researchers have initiated collaborations by studying 55 MI-BC patients treated at UC Davis Cancer Center with neoadjuvant chemotherapy. The primary goal of this study is to develop and validate a microRNA profile of MI-BC that is predictive of patient response to neoadjuvant chemotherapy. A secondary goal of the study is to understand the mechanism by which differentially expressed microRNAs mediate chemosensitivity.
Rehovot's Rosetta Genomics http://www.rosettagenomics.com develops and commercializes a full range 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 and commercialization of a full range of microRNA-based diagnostic tools. (Rosetta Genomics 28.06)
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8.3 Abbott to Fund Pharmaceutical & Diagnostics Research at the Weizmann Institute
Abbott and Yeda Research & Development Company, the commercial arm of the Weizmann Institute of Science (WIS), have signed a three-year agreement in which Abbott will fund research programs at the Weizmann Institute of Science in selected health care fields. The collaboration will explore scientific opportunities in pharmaceutical discovery, biomarker identification for targeted drug therapies, and advances in diagnostics technologies. Yeda Research and Development Company is the commercial arm of the WIS. Yeda initiates and promotes the transfer to the global marketplace of research findings and innovative technologies developed by WIS scientists. The Weizmann Institute of Science in Rehovot, Israel, is one of the world's top-ranking multidisciplinary research institutions. Noted for its wide-ranging exploration of the natural and exact sciences, the Institute is home to 2,700 scientists, students, technicians and supporting staff. (Abbott 01.07)
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8.4 Teva Enters Israeli Infant Formula Market
Teva Pharmaceutical Industries officially entered the Israeli infant formula market in partnership with Groupe Danone unit Nutricia. Teva has not yet disclosed the brand name that will be used in Israel, but it is one of the most popular brands in Europe. Teva's infant formula is scheduled for launch toward the end of the year. The company is currently in the process of obtaining Ministry of Health certification. Teva Israel said that the company's entry into a market dominated by suppliers will greatly change the market in favor of consumers, in part by offering "fair" prices. The infant formula sector will become part of Teva's pharmaceutical operations, which includes prescription & non-prescription drugs and consumer products. Teva Pharma Israel said that the company has an advantage with hospitals and doctors "as a provider of health services", which is a key anchor in winning consumer confidence. Israel's infant formula market is estimated at NIS 500 million a year, according to Nielsen consumer price figures for June 2010-May 2011. Estimated market growth is 6% a year. According to Nielsen, the market is dominated by two brands: Materna has a 54% share, and Similac has 45%, in financial terms. (Globes 27.06)
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8.5 CEL-SCI Announces Start of Multikine Phase III Study by Teva in Israel
Vienna, Virginia's CEL-SCI Corporation announced today that its partner Teva Pharmaceuticals has concluded the Site Initiation Visit for the first Israeli clinical center in CEL-SCI's Phase III clinical trial for Multikine, the Company's flagship cancer immunotherapy. The first hospital is Tel Aviv Sourasky Medical Center. Patient enrollment is expected to start soon in this center. Teva plans to sign up another 2 Israeli clinical centers to conduct this study, which is already ongoing at multiple clinical sites in the United States, Canada, Poland, Hungary, Taiwan and India. The total study is expected to enroll about 880 head and neck cancer patients in over 40 hospitals in 9 countries. CEL-SCI's partner Orient Europharma will conduct parts of the Phase III study in Taiwan. Teva holds exclusive marketing rights to sell Multikine in Israel and Turkey. (CEL-SCI 27.06)
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9: ISRAEL PRODUCT & TECHNOLOGY NEWS
9.1 Tier One Carrier Selects Traffix Diameter Router Solution for LTE Network Deployment
Traffix Systems announced the selection of the Traffix Signaling Delivery Controller (SDC) Router solution by a North American tier one carrier, following extensive performance testing proving the technological superiority over other solutions. Most significantly, the Traffix SDC handles up to 1 million Diameter messages per second (MPS) in a single chassis, and demonstrates its robustness, high scalability and intelligent routing control in 25 deployments worldwide. As one of three Diameter solutions consolidated on the SDC platform, the Traffix Diameter Router serves as a signaling network hub with intelligent, contextually aware routing that simplifies integration, reduces operational costs and guarantees the reliability of quality of service. The Traffix Diameter Router solution is fully compliant with 3GPP Diameter Router Agent (DRA) for policy, 3GPP Interworking Function (IWF) requirements and GSMA Diameter Edge Agent (DEA) guidelines for roaming, plus many more. It was designed especially for large networks with complex network architectures and multiple Diameter nodes that require central signaling management, network troubleshooting visibility and intelligent routing. The Traffix SDC answers carriers' needs for cost-effective connectivity, unlimited scalability and simplified control in their migration to LTE networks and will enable this North American tier one carrier to maintain optimized performance for customer satisfaction.
Hod HaSharon's Traffix http://www.traffixsystems.com is the Diameter control plane expert since 2005. Traffix leads the control plane market with a range of Diameter products deployed at over 100 operators worldwide. Traffix supports telecommunications service providers to build high capacity, high performance data networks for a cost-efficient path to 4G. (Traffix22.06)
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9.2 Elbit Systems to Supply DIRCM Systems to the Italian Air Force
Elbit Systems announced that it was awarded a contract valued in excess of $15 million by Elettronica S.p.A to participate in a program to supply the ELT/572 DIRCM (Directed Infra-Red Countermeasures) system for installation on various platforms of the Italian Air Force, including the C130J, C27J and AW101. The contract will be performed over the next three years. Based on Elbit Systems Electro-Optics Elop MUSIC system, ELT/572 was jointly funded by Elettronica and Elop under a cooperation agreement between the companies. MUSIC is based on advanced fiber laser technology and counters MANPADS (man portable air defense systems) by emitting a laser beam towards an approaching missile causing the missile to veer off course.
Haifa's Elbit Systems http://www.elbitsystems.com is an international defense electronics company engaged in a wide range of programs throughout the world. The Company, which includes Elbit Systems and its subsidiaries, operates in the areas of aerospace, land and naval systems, command, control, communications, computers, intelligence surveillance and reconnaissance (C4ISR), unmanned aircraft systems (UAS), advanced electro-optics, electro-optic space systems, EW suites, airborne warning systems, ELINT systems, data links and military communications systems and radios. (Elbit 22.06)
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9.3 MiniFrame Launches a New Multi-seat Product for Home Users
MiniFrame announced the release of its new product today – SoftXpand 2011 Duo. SoftXpand 2011 Duo is based on the recently released SoftXpand 2011, a new break-through technology that supports Windows 7 (both 32 and 64 bit) and Windows Server 2008 R2 operating systems. SoftXpand 2011 Duo expands the use of any laptop or desktop allowing an additional person to work simultaneously and independently on the same computer. The additional workstation can be easily added by connecting a monitor, keyboard and mouse to the PC. SoftXpand 2011 Duo is ideal for home use, each user can surf the web, play a computer game or stream full HD movies while using only a small fraction of the PC's CPU capabilities. SoftXpand 2011 Duo is available to purchase online, while SoftXpand 2011 is distributed worldwide through MiniFrame partners. Together with the SoftXpand 2011 Duo launch, MiniFrame releases a new improved version of SoftXpand 2011, which was initially launched in April 2011. SoftXpand 2011 is the only zero client product that can easily fit into any type of organization. The product enables new cutting edge B2B solutions including Point of Sale, Interactive Digital Signage and Digital Menus in restaurants. For the consumer market, SoftXpand 2011 offers unique entertainment and smart home solutions that simply connect all TV's, computer monitors and mobile devices to a single PC using existing network & wireless infrastructure.
Netanya's MiniFrame http://www.miniframe.com is a leading player in the software desktop virtualization market. The company develops and markets its SoftXpand technology that transforms the world of desktop computing, by turning any computer into multiple independent workstations. SoftXpand products provide top-performance multi-seat solutions for various B2B and B2C markets. MiniFrame established strategic relationships with leading companies and is seeking other partners to leverage SoftXpand technology to new markets and solutions. (MiniFrame 27.06)
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9.4 Mellanox Accelerates Half of the World's Petaflop Systems
Mellanox Technologies announced that the company continued its command as the leading global interconnect provider for the TOP500 list of supercomputers. As reported in the June 2011 TOP500 list, InfiniBand-connected systems grew at a CAGR of 20% from 2008-2011, connecting and delivering leading performance and efficiency to 206 supercomputers. Mellanox's scalable interconnect solutions accelerate all five of the InfiniBand-based Petascale systems on the TOP10 and deliver the best power-efficient Petascale system: 2X better versus the combined Petascale systems average. The advanced offloads and accelerations within Mellanox InfiniBand products enable the most performance efficient system on the TOP500 list, with 96.3% system and CPU efficiency. From June 2010 to June 2011, the total number of InfiniBand-connected CPU cores on the TOP500 list grew 34% and the amount of InfiniBand-based system performance grew 44%. This growth highlights the surging demand for InfiniBand as a way to maximize computing resources, productivity and scalable performance in the world's fastest computer systems.
Yokneam's Mellanox Technologies http://www.mellanox.com/ is a leading supplier of end-to-end InfiniBand and Ethernet connectivity solutions and services for servers and storage. Mellanox products optimize data center performance and deliver industry-leading bandwidth, scalability, power conservation and cost-effectiveness while converging multiple legacy network technologies into one future-proof architecture. The company addresses a wide range of markets including HPC, enterprise, mega warehouse data centers cloud computing, internet and Web 2.0. (Mellanox 27.06)
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9.5 RiT to Provide its IIM Solution for Datacenter Management to Global Financial Institution
RiT Technologies received several major new orders from one of its largest customers, a top-tier diversified financial services company. The orders, which total over one million dollars, are for the expansion of the PatchView intelligent infrastructure management (IIM) systems currently deployed in the client's international headquarters and central datacenters. This global account has been a satisfied RiT customer for many years, and credits RiT's PatchView with having helped it maximize network continuity, minimize ongoing maintenance costs, enforce physical layer security and simplify infrastructure planning. The projects will include the implementation of IIM systems in new datacenter and people workspace facilities in branch offices and the integration of the RiT solution throughout the organization with the customer's internal systems. Tel Aviv's RiT http://www.rittech.com is a leading provider of intelligent solutions for infrastructure management, asset management, environment and security, and network utilization. RiT Enterprise solutions address datacenters, communication rooms and workspace environments, ensuring maximum utilization, reliability, decreased downtime, physical security, automated deployment, asset tracking, and troubleshooting. RiT Carrier solutions provide carriers with the full array of network mapping, testing and bandwidth qualification capabilities needed for access network installation and service provisioning. (RiT 04.07)
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9.6 Golan Heights Winery Sweeps Top International Prizes
Golan Heights Winery continues to pave the way for excellence in Israeli winemaking. In 2008, Golan Heights Winery became the first winery from Israel to rank in Wine Spectator's Top 100 Wines of the Year, an accomplishment which the winery will equal with Israeli winemaking "firsts" at the 2011 VinItaly competition and Les Citadelles du Vin in Bordeaux. In March 2011, Golan Heights Winery won the prestigious Gran VinItaly Special Award for Best Wine Producer of the Year at the 19th International VinItaly 2011 Wine Competition, held in Verona, Italy. The winery bested over 1,000 wine producers from 30 different countries, including France, Italy and Spain. Golan Heights Winery also received two Grand Gold Medals at VinItaly for the 2009 Yarden Odem Organic Vineyard Chardonnay and the dessert-style 2008 Yarden HeightsWine, an achievement that earned special recognition for most Gold Medals at this year's VinItaly. On 18 June, Golan Heights received the Citadelles du Vin 2011 Gold Medal for the 2009 Yarden Odem Organic Vineyard Chardonnay. Sister winery, Galil Mountain Winery, also received a gold medal for the Galil Mountain Meron 2007. In addition, Golan Heights accepted a Special Prize for distinction for winemaking from Israel. (GHW 29.06)
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10: ISRAEL ECONOMIC STATISTICS
10.1 Israel's Unemployment Hits Historic Low
On 23 June, the Central Bureau of Statistics announced that the rate of unemployment in Israel fell in April to 5.8%. This is an all-time low, beating the previous historic low for unemployment of 5.9% in the summer of 2008. The unemployment rate is down from 5.9% in March and 6% in February. At the end of May, the Central Bureau of Statistics reported that unemployment in the first quarter of 2011 was 6%, when there were about 192,000 people unemployed. In Q4/10 unemployment was 6.5%. The Central Bureau of Statistics reported that in Q1/11 there were 3,187,000 people in Israel's workforce. Some 57% of Israelis over the age of 15 are part of the workforce - 62% of men (compared with 62.2% in the preceding quarter), and 53% of women (compared with 53.3% in the preceding quarter). (CBS 23.06)
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10.2 Mixed Healthcare News for Israel in OECD Report
The OECD's latest report brought mixed news regarding Israel's standing in relation to other OECD nations. It said Israelis are healthier than most. Infant mortality is relatively low, at 3.8 per 1,000 births compared to an average of 4.4, obesity is lower than the European average and both men and women have a higher life expectancy than the OECD average. Fertility is high, with the average Israeli woman giving birth to three children, more than in any other OECD country. The high natural growth means the average working Israeli has more dependents than average.
The report found that while Israelis are in relatively good health, the healthcare system infrastructure is overburdened. Israel's hospitals are the most crowded found among OECD nations, with wards filled to an average of 96.3% of capacity. Staffing received mixed marks: Israel's doctor-to-patient ratio is higher than the average, at 3.4 doctors per 1,000 citizens compared to 3.1, but the nurse-to-patient ratio is low, standing at 4.5 per thousand compared to an average of 9.1. Israel's hospitals treat an average of 180,000 Palestinian Authority Arabs per year in addition to Israeli patients. (Ynet 02.07)
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10.3 Israeli Food Prices Outstrip Europe By Far
A new study by the Knesset Research and Information center confirms "Globes" findings that food in Israel is far more expensive than in Europe. The research found that over the past five and a half years Israeli food prices have risen by far more than in Europe and the US. From 2005 to May 2011, food prices in Israel rose by 12.7%, while in the 17 euro bloc countries prices rose by just 1.1%. The rise in prices in Israel was three and a half times higher on average than the 3.6% average price rise in food recorded in the 27 member states of the European Union. Moreover, in a period when Israel saw a sharp rise in the consumer food price index, there were some western countries where the index fell. In Switzerland, for example, food prices fell by an average of 4.7%, and in Greece they fell by 3.5%, while in Ireland, Spain, and Norway prices were eroded. Food prices to the consumer rose not only compared with other countries, but also compared with the indices of agricultural inputs and the food industry output index. While these two indices rose by a similar amount, the food prices index continued to rise sharply. The research found that over the five and a half years covered, the price of natural yoghourt rose 46.2%, the price of cottage cheese rose 41.3% and the price of white cheese rose by 32.3%. Over this period sour cream and a carton of milk rose by 15.5%. (Globes04.07)
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10.4 Israel Leads in Regressive Taxation
The State Revenues report for 2008/9 reveals that Israel leads in indirect taxes. These are regressive taxes that hurt the poor. The report also shows that Israel's tax burden is no longer onerous. The overall tax burden in 2009 was 31.4% of GDP, close to the OECD average of 31.1%. However, a breakdown of taxes by type, shows that Israel diverges sharply from the average toward the extremes. Israel has the lowest ranking for direct taxes (taxes on individual and companies' income, and the capital market) in the OECD, after the government implemented its policy to slash them. In 2009, the direct tax burden was 13.4% of the labor cost of a childless individual with a salary that was 67% of the average wage, compared with 32.4% for OECD states. This figure put Israel 30th of 31 OECD members. Israel was the fastest tax cutter in the OECD. Israel was in first place in the reduction of direct taxes as a percentage of labor costs in 2002-09.
The cuts in direct taxes are financed by a jump in indirect taxes (VAT, purchase tax and customs duties). Israel's VAT, the primary indirect tax, had the highest in the OECD as a percentage of total tax revenues, at 33.5%. This situation has since worsened, as the Netanyahu government, which came to power in February 2009, has further raised indirect taxes while reducing direct taxes. The government also allowed NIS 38.4 billion in tax breaks, amounting to 18% of total tax revenues. The State Revenue Division calculates that if all tax breaks were abolished, overall taxes could be cut by 15%. A breakdown of the tax breaks clearly shows that they increase with an individual's wealth. The government foregoes NIS 10.2 billion in taxes on revenue from provident and advanced training funds, NIS 6 billion in taxes on gains from interest and capital investments and NIS 2.2 billion in betterment taxes. (Globes 27.06)
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10.5 Defense Consumption in 2009: 6% of Israel's GDP
In 2009, Israel devoted 6% of its gross domestic product (GDP) to defense consumption expenditures. A study conducted by the Central Bureau of Statistics shows that since Israel's defense consumption stood at a record level – during the Yom Kippur War – the defense consumption expenditures dropped by more than 20% of the GDP. This expenditure includes the defense establishment's direct spending and does not take into account loss of manpower as a result of compulsory and reserve service, or the costs of building bomb shelters and the maintenance of emergency supplies for the home front population.
From 1956 to 1975, the defense consumption expenditure grew at a quick pace of 15-16% a year. In 1973 (the year of the Yom Kippur War), the defense consumption reached a record level of 31% of the GDP. From 1976 to 1995, the defense expenditures dropped gradually, by 2-3% a year, reaching 11% of the GDP. IN 1996, an upward trend began, but since the economy experienced rapid growth those years, the defense expenditure as a percentage of the GDP continued to drop.
In 2009, the defense expenditure reached 6% of the GDP, after falling 1.5% in 2008 and 2.7% in 2009. The overall cost of defense is about 20% higher than the defense consumption expenditure. This cost reached 7.8% of the GDP in 2009 – compared to 8.4% in 2008 and 9.7% in 2000. The overall defense cost is calculated from the defense expenditure in addition to the expenditure on building bomb shelters and maintenance of emergency supplies, in addition to the approximation of the work soldiers would do had they been civilians working in the economy and the employer provisions for the salary of reserve soldiers and charging a risk premium to the military service. (CBS 05.07)
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10.6 Israel Ranked 14th in Global Innovation
The results for the fourth edition of The Global Innovation Index (GII) 2011 have just been published and Israel is ranked number 14, a significant improvement over its number 23 position last year. The GII recognizes the key role of innovation as a driver of economic growth and prosperity. Launched in 2007 by INSEAD eLab, the GII has become an important tool in benchmarking continued progress in countries. The GII provides advanced metrics and approaches to better capture the richness of innovation in society and go beyond traditional measurers. With a population of 7.3 million, Israel is ranked number 96 in global population. The top three ranked countries in the Index are Switzerland, Sweden and Singapore. The United States is ranked seventh with Canada below them at eight. The only other Middle Eastern country in the top 30 is Qatar at 26. (Various 04.07)
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11: IN DEPTH
11.1 ISRAEL: Macro Smile - Say Cheese
Morgan Stanley's http://www.morganstanley.com Tevfik Aksoy writes on 5 July that without doubt the Israeli economy remains one of the most robust and well managed among both the developed and the emerging market economies. Having shown an excellent track record in weathering the most recent crisis via timely monetary and fiscal policy responses, the country earned well-deserved respect and confidence among global investors. This view is also shared by local residents, adding to consumer confidence such that the above-trend growth in recent years has been primarily driven by domestic demand.
We have had a very positive view on the Israeli economy over the past three years, and our regular country trips have done nothing but help fortify our constructive stance. Our recent trip to Jerusalem and Tel Aviv was no exception: Our meetings with officials at the Bank of Israel, the Ministry of Finance as well as economists and market participants at local banks and brokers were highly encouraging.
Positive impressions from our recent trip: We came back with the same positive view, but we also went ahead with some macro forecast revisions as well as some changes to our policy rate call. We also took note of some geopolitical concerns, especially surrounding the possible declaration of an independent state by the Palestinians in September and the possibility of the emergence of some noise (at the least) or extended macro weakness (at worst) associated with it and how it might be handled. We also made a slight change in our monetary policy rate forecast, and we now expect the policy rate to rise to 3.75% in 2011.
Growth remains intact and scope for upside surprise: Taking into account the recent indicators of growth and our discussions during the trip, we decided to raise our real GDP growth forecasts moderately for both 2011 and 2012 in the order of 0.5pp. We now expect the growth rate to reach 4.8%Y as opposed to 4.3%Y, suggesting that the growth rate attained in 2010 will be maintained. Overall, the economy seems to be driven more by domestic demand rather than exports and the gradual appreciation in the currency as well as weakening external demand signal no meaningful reversal of this pattern.
Economy is reaching full employment but wage pressures yet to come: The above-trend growth rate (we assume average trend growth to be 3.5-4%) that had been in place, coupled with the significant decline in unemployment that has been pushing the economy towards full employment, suggest that the output gap is closing.
While the labor market conditions have been improving rapidly and the unemployment rate was near all-time lows, there seems to be no wage pressure prevailing in the economy. Hence, until we start noticing a change on that front, we doubt that the BoI will be concerned by the closing of the output gap. Another positive development was the high growth in capital investment that has been pushing potential output higher over the past years. That said, this is an area that needs close scrutiny, as above-trend growth will cause wage pressures eventually unless a marked improvement in the labor force participation rate materializes in the coming quarters.
Inflation to ease gradually and slowly: Our discussions at the BoI as well as with market participants confirmed our view that the direction of inflation will be downwards for most of 2011 and in 2012 provided no major terms of trade shock occurs or unless the currency goes through a bout of weakness, as opposed to the consensus view that it is likely to remain strong.
Cottage cheese - more than just a cheese: Recently, the Israeli public held protests (via Facebook and boycotts) soon after the price of cottage cheese went through a massive price hike: 40% in the past three years and the main change taking place in the past year after the removal of government controls on dairy products. The move went unnoticed by most non-Israelis or perhaps it was merely perceived as an ordinary reaction to a price change. However, after hearing the details first hand, we realized that it had a significant symbolic meaning, which turned out to be highly effective in the end. It is very rare, if at all, that Israelis hold protests of any kind, especially for a price change. But cottage cheese symbolizes an important household food consumption item and a significant price change would cause many families to be deprived of it. Moreover, no reaction to this could be welcoming similar price adjustments by other producers. By making a big splash and taking the issue to the headlines, Israelis for the first time in a long time managed to reverse the process to a significant extent. The day we were leaving Israel, on June 29, one of the top two dairy producers slashed its prices by a significant 20% (which is likely to be mimicked by its competitors, in our view). Aside from the fact that this might help to contain food price inflation in the near term, it might also limit future price hikes to a meaningful extent as long as similar reactions materialize. Hence, we take this development as a positive sign that the inflation target might be reached faster than we initially would have predicted. At least there seems to be a scope for a downside surprise.
House prices remain a concern for two reasons: It is a well-known fact that the supply-side constraints and the demographics in Israel coupled with the low interest rate environment pushed house prices higher. While there was some moderation in price hikes in 2H/10, recent data suggest another bout of strengthening. This remains an issue for two reasons. First is the obvious impact on inflation from higher rental prices; and second, there is growing concern regarding the ramifications of a sharp decline in house prices on banks' balance sheets but more importantly the extent of damage that it can pose for household finances and consequently for growth. In recent reports, the BoI had been stressing this issue, and we believe that even if it feels comfortable from an inflation perspective, the BoI will continue to hike the policy rate to keep such risks at bay.
Fiscal picture is very strong and financing not an issue: The Ministry of Finance's main goal of achieving the 60% debt to GDP ratio target is firmly in place. Our discussions with the officials once again gave us assurance that there is no intention to deviate from this and, based on the fiscal realizations so far, we see nothing but a very strong picture. Based on the fiscal data so far and the high revenue growth that had been happening on the back of strong growth, we now expect the deficit target of 3% of GDP to be undershot at 2.5%. We maintain our expectation that next year's target of 2% will be met. This view seems to be more or less a consensus on the ground, and hardly anyone expressed any concern for the next few years.
Debt to GDP to decline until 2013, and then what? While debt to GDP is expected to decline gradually until 2013 and our forecast for end-2012 stands at 72%, there is some doubt about the post-2013 period. While the Ministry of Finance officials assure us that the debt to GDP ratio will be easing, the BoI has doubts, especially if the planned tax cuts post-2012 are kept in place, jeopardizing fiscal results.
Current account surplus to nearly disappear: Rising energy costs, a gradual appreciation in the currency and the strength in domestic consumption should lead to a gradual decline in the current account surplus. We are lowering our current account surplus forecast to 0.9% for 2011 and 0.4% for 2012. Our medium-term assumption is that the current account will be more or less balanced in the coming years. This change, especially relative to the high surpluses of 2009 and 2010, is likely to place much less appreciation pressures on the currency.
Policy rate to rise, but more gradually and less than our previous expectation: The recent rhetoric of the BoI had been gradually turning more dovish (or less hawkish) mostly because of the fact that inflation expectations were improving slightly, oil prices have been stable and, more importantly, some tightening has already been realized. Based on this impression and our belief that inflation has already peaked, we are cutting our rate forecast a notch to 3.75% from 4% for this year. We believe that the risk to this call will be equally shared on the downside and on the upside. That is, the BoI might be satisfied with one last hike to align the real rate at around zero, although any further rise in housing prices and any escalation in the strength of the economy could be balanced by a higher hike.
Something to watch in September 2011: Earlier in the year, Palestinian leaders publicly announced that they will be declaring an independent state in September and seeking UN acknowledgment. While such a potential declaration by itself might not have any impact on Israel, the actions or efforts post-declaration might have varying degrees of ramifications for the economy. Based on our discussions in Jerusalem and in Tel Aviv, we realized first of all that Israelis are ready for various scenarios. These include a mere declaration of a Palestinian state backed by the UN (even if by a weak majority) and the associated impact, or a more extensive impact, especially if Palestinians decide to embark on a Third Intifada. Leaving the diplomatic and political issues aside, if the matter remains on the agenda for a few weeks and dies out with only minor conflicts, the impact on the economy and the markets would be minimal. If, however, regional security concerns escalate, hitting the Israeli tourism sector, consumer confidence and coupled with a possible boycott of Israeli exports by some countries, there would be considerable downside risks to growth, weaker asset prices, higher rates and possibly a loss of some reserves. Our meetings with people on the ground suggested that there are quite a few unknowns and there is no clear consensus as far as what (and if anything) might happen in September and thereafter. In general, the issue was taken into consideration but we did not get the feeling that anyone is losing sleep over the matter. At this juncture, we would consider any sharp rise in risk premium (such as a widening in the spread between the Israeli government bonds and that of the US for the same tenor) to be an opportunity to consider. (MS 05.07)
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11.2 JORDAN: Planning For the Future
Regional events are forcing Jordan to look past its traditional sources of energy, both in terms of feedstock and physical location. Disruptions in the supply of natural gas to the kingdom coupled with rising costs, mean it may look elsewhere for feedstock, while also pushing forward with its own nuclear energy program.
Jordan consumes in the region of 3bn cu meters of natural gas per year and only a small amount of that is produced domestically with 80% of the country's electricity supply is generated by natural gas secured from Egypt. The kingdom's natural gas-fed electricity power plants produce 1880 MW per year, fulfilling only around 20% of domestic demand, according to the 2009 annual report from the Ministry of Energy and Mineral Resources, the most recent information available.
Natural gas deliveries from Egypt are expected to increase to more than 7.1m cu meters per day in early July, from 2.8m cu meters per day in mid-June, according to Khaled Toukan, the minister of energy and mineral resources. However, this is significantly lower than the 8.8m cu meters Egypt shipped to Jordan in 2009. The decrease is the result of recent political unrest and attacks in Egypt's Sinai region that have disrupted the flow of natural gas.
Though the kingdom is currently in talks with Egypt regarding the quality and price of imported natural gas, it is possible that Jordan could look to Israel to also supply the feedstock that fuels the majority of its electrical power plants, according to reports from Israeli financial firm Clal Finance. Israel's Tamar offshore field, located about 90 km west of Haifa, has an estimated 246bn cu meters of natural gas. The field is expected to eventually provide for Israel's domestic production and turn the country into a natural gas exporter within several years, the Jerusalem Post reported in June. “In our estimation, the lack of faith in Egyptian gas will force Jordan to purchase at least 1bn cu meters of gas from Israel each year,” Yaron Zar, an analyst at Clal Finance, wrote in early June.
But the kingdom is also looking inwards to meet increasing energy demand and to quell an energy bill that takes up 20% of the state budget at a cost of $4bn. Like many others, Jordan is not giving up on its nuclear program, which it considers an essential part of its energy plan. The country has plans to build two reactors in the next decade, and two additional reactors are planned for the next 25 years.
June 30 is the deadline for offers by potential operators and investors for the first reactor, a $4.5bn, 1000-MW nuclear plant. Jordan is also expected to receive bids for the technology that would be used in the nuclear station by the same date. The country's atomic commission has pre-selected possible technologies from Atomic Energy of Canada, Russia's ZAO Atomstroyexport and Atmea, a joint venture between France's Areva and Japan's Mitsubishi Heavy Industries. It will take about five months to review the proposals and a selection should be made by the end of the year, Toukan said.
Emphasizing the nuclear power plant's safety in the international press, Toukan said that energy generated from oil, gas, wind and solar power will not be enough to cover the kingdom's growing demand, though the country is expanding its efforts in those areas as well. The country hopes to attract $14bn in investment in renewable energy, oil shale and nuclear power to meet rising electricity demand, which is expected to double to 5000 MW by 2020 and to reach 10,000 MW by 2030.
Jordan has been keen to court foreign investment of late, particularly in the energy sector, particularly given that the kingdom imports 90% of its oil and spent $902.8m on crude oil imports between January and April after the flow of Egyptian gas slowed. This forced the Kingdom to switch to more expensive imported diesel to meet its electricity needs.
Jordan's finance minister, Mohammad Abu Hammour, said in June that the economy is on track to see 3.5% growth this year, despite a substantial decline in investment in the first five months of the year due to knock-on effects from regional unrest. Foreign and domestic investment until end-May declined 58% from the same period last year, from JD805m ($1.1bn) in 2010 to JD336m ($473.3m) in 2011, according to the Jordan Investment Board's CEO, Samer Asfour. Foreign investment alone fell from JD163.5m ($230.3m) to JD64m ($90.1m), and domestic investment from JD641.4m (903.4m) to JD272m ($383.1m).
It will be a long road to get Jordan to a place where it can become self-sufficient in power, but enticing investment in local production will be the first step. Even though the kingdom will likely need to pay more for imported Egyptian natural gas or look elsewhere for its supply in the short term, the country must focus on realizing its long-term goal of managing its own secure supply. (OBG 05.07)
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11.3 KUWAIT: Prime Ministerial Dilemma and the Prospects for Constitutional Monarchy
Mona Kareem wrote in the Carnegie Arab Reform Bulletin http://www.carnegieendowment.org/arb on 22 June that Sheikh Nasser al-Mohammed al-Sabah was appointed prime minister of Kuwait in May 2011 for the seventh consecutive time in five years, a result of six cabinets resigning under his watch. Kuwait's version of the Arab spring has witnessed many sit-ins, rallies and protests directed against the prime minister, with politicians from various sides (including Islamists, liberals, and conservatives) taking part.
The largest sit-in was organized on March 8, with a crowd of 700 demanding the resignation of al-Mohammed and opposition figures giving speeches accusing the prime minister of corruption. This continued on and off throughout the following weeks until the cabinet presented its resignation on April 6, after parliament was brought to a standstill with requests to question three ministers, all of whom happened to be members of the ruling al-Sabah family. While many hoped that the new cabinet would not include al-Mohammed as prime minister, the Kuwaiti emir (who has exclusive constitutional rights to appoint the position) still decided to reappoint him once more.
Kuwaiti political life progressed a step in 2003 when the late emir decided to separate the roles of crown prince from prime minister. Prior to 2003, parliament was unable to question the prime minister because according to the constitution the emir is "untouchable," and questioning the crown prince meant questioning the country's future emir. Even after this change, the reticence to question those clearly slated to be the future Kuwaiti emir has persisted: during his term as prime minister (2003-2006), few questioned Sheikh Sabah al-Ahmed. From his long diplomatic and political history, extensive alliances, and strong character, many guessed (correctly) that he would be the next emir or, at the very least, the country's crown prince.
This is in stark contrast to the incumbent Sheikh Nasser al-Mohammed, who is not the heir apparent, and whom parliament has wanted to question from the beginning. Three months after al-Mohammed's February 2006 appointment, parliament called him for questioning regarding changes made to laws governing electoral districts, only to be dissolved at the request of the emir before any action could be taken. Twice thereafter the emir dissolved parliament in reaction to rising tensions between the legislative body and various ministers (including al-Mohammed himself). Al-Mohammed finally had to face parliament alone because the emir's options were exhausted after several cabinets resigned and three parliaments were dissolved, leaving no way to calm the tensions between the executive and legislative branches.
Following all this tension, one may fairly ask what has been accomplished and who is to blame for the continual clashes between the legislature and the executive branch of government. Many Kuwaitis believe the current situation to be a reflection of a struggle inside the ruling family, with parliamentarians linked to family members seeking to further their own economic or political interests. Sheikh Nasser al-Mohammed is not the first prime minister to be linked to corruption, but depriving him of credit for his achievements might serve the interests of those who want to ensure that he will not be a viable candidate for emir.
This clash inside the ruling family has not been limited to using members of parliament and constitutional authority, but has also extended to manipulation of the media and other parts of society. Kuwait developed its first private television channel only in 2004, when the owners of al-Ra'i newspaper launched a station, followed by the owners of al-Watan in December 2007. After these, numerous other TV channels started up simply to further their own particular agendas through (by Western standards) relatively unprofessional talk shows. Al-Watan TV, for example, aimed for commercial success but also worked extensively to support Sheikh Ahmad al-Fahad against the prime minister. Most Kuwaiti broadcast media either support or condemn al-Mohammed, with the supporting stations accused of being state-sponsored.
Al-Fahad, the former deputy prime minister and minister of development and housing, is the other strong player in the ruling family fighting against the current prime minister. He recently resigned on June 9 after refusing to face a parliamentary inquiry regarding his finances, in which his role in the Kuwait Olympic Committee and performance as development minister came into question. While heading up the ministry of oil and energy from 2003 to 2006, al-Fahad was accused of corruption and excluded from government for several years. His allies in parliament include a number of Salafi partisans who have been attacking the prime minister. Some observers postulate that the emir indirectly referred to the Salafis in a June 19 speech, saying: “Some have crossed the lines that are set by the constitution to protect democracy and freedom; they have turned from the core values of Kuwaiti society: respect for the law, the constitution, and commitment to decency."
While replacing the current prime minister might appear to be the easy solution to Kuwait's political paralysis, his replacement would in fact face the same issues, as each member of the royal family has his enemies. One way out of this dilemma would be to elect a prime minister, which would constitute another step toward the constitutional monarchy that only Kuwaiti liberals have demanded in any serious way. Theoretically, an elected prime minister should end the continuous clash between the government and the parliament, as the legislative body would be no longer be engaged in fueling the divisions in the family and, by extension, competition over succession would remain entirely inside the al-Sabah family. Parliament would be able to proceed with its regular tasks as demanded by citizens, while the emir would have the last word about the successor to the throne after the current Crown Prince Sheikh Nawaf al-Ahmad. Mona Kareem is a journalist and poet. (CARB 22.06)
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11.4 EGYPT: Fitch Affirms Egypt at 'BB'; Outlook Negative Ratings
On 28 June, Fitch Ratings http://www.fitchratings.com has affirmed the Arab Republic of Egypt's Long-term foreign currency Issuer Default Rating (IDR) at 'BB' and Long-term local currency IDR at 'BB+'. Both ratings have a Negative Outlook and the Rating Watch Negative (RWN) has been removed. The agency has also affirmed the Country Ceiling at 'BB' and the Short-term foreign currency IDR at 'B'.
"The affirmation and Negative Outlook signifies that although negative rating pressure on Egypt has eased in the short term, political outcomes remain uncertain and could lead to negative rating action in the year ahead if political unrest returns or the government that takes office next year adopts more populist policies, with adverse implications for debt dynamics and reform," says Richard Fox, Head of Middle East and Africa Sovereigns at Fitch.
Egypt's emerging economic picture and recent policy announcements paint a mixed picture. The GDP contraction in Q111 (-4.2% yoy) was deeper than expected and official reserves have dropped sharply. However, the current account deficit widened less than expected and tourism, a key growth and external driver, seems to be recovering more rapidly than previously thought likely. Most recently, the government has announced a lower budget deficit for FY2011/12 (year ending June) of 8.6% of GDP, but one that will make less use of foreign financing than previously budgeted. In particular, the government has decided not to go ahead with a one-year IMF drawing which had been expected to be approved in July.
The lower budget deficit is welcome as it will help stabilize the public debt ratio. Egypt's high budget deficit and debt ratios, both in absolute terms and compared to peers, are its main rating weakness and the current rating has little tolerance for sustained worsening. The deficit in the fiscal year just ending will approach 10% of GDP, mainly due to revenue losses following the political upheavals in January/February. The government's decision to significantly lower this in the coming fiscal year, at a politically sensitive time and when popular expectations have been raised, sends an important signal about Egypt's willingness to return to a path of fiscal consolidation as soon as possible.
Nevertheless, the challenges that led the government to originally propose a deficit of 10.9% of GDP in 2011/12 have not gone away and will be faced by whatever government emerges from this year's elections. Measures needed to make major inroads into the deficit - reducing energy subsidies and introducing VAT - will be no easier for the new government than its predecessors. A renewed worsening of debt dynamics is therefore still a longer-term risk, justifying a continued Negative Outlook, until the new government's policies are clearer.
On the external front, which has long been a key rating strength, the Q1/11 current account deficit of $1bn did not significantly worsen, despite the sharp fall in tourism revenue. The drop in official reserves of almost a quarter by May, was mainly due to outflows of foreign direct and portfolio investment. Net outflows continue but at a much diminished rate and the reserve decline slowed appreciably in May. Although the decision not to draw from the IMF and some other multilateral lenders increases the risk of continued short-term reserve pressure, pledges from bilateral lenders have begun to crystallize and should help stabilize reserves. However, Egypt's reserve cushion and net creditor position have been eroded by recent events and with an expected wider current account deficit this year, policies to attract foreign investment will remain at a premium if the erosion is to be stemmed.
Egypt will hold parliamentary elections in September and presidential elections before the end of this year. This is uncharted territory for Egypt and outcomes are uncertain. Renewed political unrest and/or poor policy choices by the incoming government could result in a rating downgrade. By contrast, if the election process is smooth and results in a government committed to fiscal consolidation and reform, and the economy continues to recover, the Outlook could revert to Stable. (Fitch 28.06)
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11.5 EGYPT: After the Revolution - Egypt's Struggle to Reinvent Itself
Der Spiegel http://www.spiegel.de writes that a new state is being born in Egypt in the wake of the revolution. While the old guard is battling to preserve its influence, scores of new parties are jockeying for power, including the Muslim Brotherhood, which is resorting to shrewd tactics in a bid to cement its political clout.
On the banks of the Nile, politicians of all kinds are vying for power in a democratic contest the likes of which Egypt hasn't witnessed in generations. The severity of their clashes shows how rapidly freedom of opinion has developed -- and how limitless that freedom now is. But the dreams of the fearless protestors who took to the streets in January are at risk of being crushed in a power struggle among Egypt's resurgent old guard.
Five months after Hosni Mubarak, who ruled the country for 30 years with a single political party and a clique of corrupt corporate leaders, stepped down at the age of 83, Egypt's population of some 80 million is mired in a political swamp. It is hard to discern the democratic reforms, the long-overdue improvement in living conditions and the more equitable social order that Egyptian protestors longed for. "It's business as usual," wrote the popular weekly newspaper Al-Fajr (The Dawn) in a resigned commentary. "The old powers are still in control."
Very few of Egypt's key government decision-makers have had to give up their posts. Only a handful of prominent officials, such as Information Minister Anas el-Fiqqi and Mubarak's previous long-standing advisor and secretary general, Safwat el-Sherif, were replaced. Their staggering corruption and blatant nepotism rendered them untenable.
The cleaning-up necessary for a credible fresh start has been sluggish, even though Egypt's political parties have gradually been putting pressure on the country's ruling military council. However, even critics concede that some progress has been made: Mubarak's sons have been detained, and the former ministers of housing and tourism have each been sentenced to five years in prison. The government has also asked Interpol to help track down former officials who fled Egypt -- another step forward. But attempts to cover up past transgressions, and the continued delays in prosecuting Mubarak -- who is permitted to order his personal hairdresser to come from Cairo to his residence in the resort town of Sharm el-Sheikh -- betray the reluctance of the military council and the justice system to deal with the legacy of the old regime.
Egypt May Soon Have More than 45 Political Parties
Security also leaves much to be desired. Crime is rife due to a lack of police operations. Unknown gangs have meticulously dismantled and stolen some 300 kilometers of train track along an important route across the Suez Canal towards Palestine and Israel.
For weeks, the political landscape has been in a state of surprisingly spirited transformation. The country may soon have more than 45 political parties, if all of the announcements are brought to fruition. The approval process is simple. The military council only bars political parties that are based on religion. Religious parties are forbidden.
That rule is no longer being enforced to the letter. But the leader of the Coptic Church, Shenouda III, forbade his 10 million followers from establishing Christian parties. Even the Arabian Peninsula's wealthiest resident, billionaire Egyptian business leader Naguib Sawiris, has adhered to that requirement and limited his political activity to providing financial and staff support to liberal parties. His In-TV has become the most popular non-partisan television channel. He doesn't transmit pro-Christian propaganda.
The heavily traditional Wafd Party, which has for decades embodied modern secular values, also abstains from any religious symbolism -- with the exception of the crescent and cross which form the party's emblem. To emphasize its openness to all denominations, Wafd established a scarcely credible alliance with the Muslim Brotherhood, Egypt's most powerful Islamist movement. But powerful Wafd party members such as executive committee member Mohammed Sarhan quickly rebelled against the alliance, and the anti-Islamist party youth arm plans to establish a "completely liberal" Neo-Wafd Party in a few days.
How Egypt's New Politicians Are Jockeying For Power
Many of the new liberal parties have formed electoral alliances, and some of them even share members. The goal is a new democratic state with a civil social structure protected by the constitution. That is how Egypt plans to circumvent the term "Laicism" that representatives of political Islam have decried as an "attack on God and Islam."
The Freedom and Justice Party of the fundamentalist Muslim Brotherhood, which has, since its foundation in 1928, never held government power, runs a propaganda network unlike that possessed by any other political group. Internet, Facebook and YouTube experts are working to sell the Brotherhood as a normal democratic power with an Islamic ideology.
The Brotherhood's leader, Mohammed Badie, has set the ambitious goal of seizing 50% of parliamentary seats. He wants to institute Sharia law, the Islamic code of justice that has been seen as the "first source of jurisprudence" since the era of former President Anwar Sadat. In order to gain acceptance socially and in the international political sphere, the Muslim Brotherhood, among whose stated goals include that of establishing a caliphate, says it agrees with the principles of civil government. But the flaw can be found in the details. Prominent spokesmen and members of the Muslim Brotherhood's leadership, like Professor Salih, reveal in talk shows how far their supposed concession to a multi-faith society really goes: "Even the state of the Prophet Mohammed was based on a civil society," said the normally eloquent Salih.
The Brotherhood has opposed suggestions that the parliamentary elections currently planned for September be postponed. This could, and would, help the new liberal parties, especially the politically-inexperienced revolutionary youth, by giving them more time to cultivate their image -- to the detriment of political Islam.
The pious are fighting for their future and they have no qualms about the tactics they deem necessary to win. The Brotherhood offered Christian lawyer Rafiq Habib the post of the party's deputy president. He accepted. Many in the Christian community criticized the move as an act of treason.
The presidential candidates are still far from achieving political breakthroughs.
The ranking compiled by neutral Egyptian media is topped by Amr Moussa, a former foreign minister who was Secretary-General of the Arab League until recently. Many Egyptians, both Muslims and Christians, are pinning their hopes on him. They were impressed by his open support for the revolutionaries from the very beginning, his political distance to President Mubarak who had removed him as foreign minister because of his growing popularity, and his criticism of the US policy on the Middle East.
At the bottom of the list is Ayman Nour, the founder of the small, liberal, chameleon-like El Ghad party (Ghad means Tomorrow). Washington had long described him as the most promising candidate. But even the army's poll of presidential hopefuls published this week gave him just 1%.
Mohamed ElBaradei remains an important candidate. He campaigned for democratic change, which gained him support especially in the West. He is working with political think-tanks on drafting proposals for a new democratic constitution. But others had already done so before him, such as members of the Wafd Party and various youth forums following the start of the revolution. The first brave Egyptian to call for democracy and freedom of opinion was the Catholic founder of the mass movement Kefaya, George Ishak.
Meanwhile, the Muslim Brotherhood is making headway in its campaign in the villages and city slums where imams are trying to persuade the faithful that everyone who denies the party of the Muslim Brotherhood his vote is betraying Islam.
Liberal Parties Taking Action Too
But the liberal parties are now engaging in similar agitation and aren't doing badly, even though they joined the fray fairly late. The liberal parties want to exercise control over the Brotherhood, which poses dangers to them. They have entered into an electoral alliance with the Brotherhood in which all participants must commit to refraining from religious election propaganda, discrimination based on gender and membership of a social group is forbidden and all political principles that apply in the democratic West must be adhered to. "We pay very close attention to that," Kefaya leader Ishak told SPIEGEL ONLINE. "Anyone who doesn't stick to these rules isn't our partner anymore."
This Tuesday several revolutionary youth organizations will announce the formation of a "Party of Revolutionary Change." The popular 24-year-old politician Mu'adh says: "We will set sail with our feluccas (traditional Nile sailing boats) under the right wind. New million-strong protests on Tahrir are possible."
If the army sticks to the timetable, there will be a democratic Egypt in less than one year, even if parliamentary elections are delayed for several months. The question of whether there should be a new constitution before the parliament and president are elected isn't as crucial as critics claim. The basic elements of the new constitution have already been set since March: free elections, a presidential term limited to five years, the removal of religion from all party propaganda, equal status for all citizens, and the construction of a free civil society. (Der Spiegel 27.06)
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11.6 EGYPT: Defense and Security Report for Q3 2011
Research and Markets http://www.researchandmarkets.com "Egypt Defense and Security Report Q3 2011" says Egypt is undergoing dramatic political change, with ex-President Mubarak being ousted by millions of protesters and replaced by a transitional military government: the Supreme Military Council. Preparations are being made for the move to democracy, with political parties being formed and the country's constitution being rewritten. A presidential election is expected in late 2011, though timetables are still under discussion. Overall, Egypt is facing its most uncertain period since 1952, when military officers overthrew the monarchy and installed Gamal Abdel Nasser as the country's dominant political figure.
Although Mubarak and his government have now resigned and the ousted president put under house arrest, his assets frozen pending investigation, the pro-democracy protests and strikes continue. Further protest activity should be expected over the coming months, although demonstrations will increasingly focus on economic, rather than political grievances. A constitutional committee was formed and is preparing a raft of amendments for referendum. BMI believes that the most likely direction for the newly emerging Egypt to take would be to avoid a decisive break with the West and instead adopt a multi-vector foreign policy that would distance it somewhat from the US and Israel, while pursuing warmer relations with Iran, Turkey, Russia and China.
Thus far, the main trends in terms of defense spending and procurement remain intact. While the military is likely to remain a key player in whatever polity ultimately emerges in Egypt, it will have the ability, the willpower (and, perhaps, given multiple security threats, the need) for defense spending to remain high. BMI has already revised its forecast of economic growth for this year down to 3.2%. In the event that Egypt slips into recession, the defense spending ratio will likely increase. The long-standing and large scale procurement program (which is substantially, but not entirely, funded through the US' Foreign Military Financing (FMF) program appears set to continue. Big ticket purchases announced since the beginning of 2010 include 24 more F-16 aircraft and four fast patrol boats. As of April 2011, the governments of France and Germany had suspended sales of arms to Egypt in the wake of the recent unrest. However, the US and UK governments have not followed their lead. (R&M 01.07)
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11.7 EGYPT: Need for 86 Billion Cubic Meters of Water By 2017 Attracts Investors Interest
With Egypt's population projected to grow from 83 million in 2010 to 95 million in 2015; the country's water resources should be bolstered to deal with the surge in demand for fresh water. Worldwide, the average water availability is approximately 7,000 cubic meters per person per year, whereas in Egypt, it is 860 cubic meters per capita per year. If this state of affairs persists, water scarcity will reach critical levels, and the per capita availability will reduce by half by 2050. This alarming drop in water availability will be of considerable interest to the water and wastewater sector, as the situation offers abundant opportunities for the development of water and wastewater treatment and distribution and collection networks in the country.
New analysis from Frost & Sullivan http://www.environmental.frost.com, Assessment of Water and Wastewater Sector in Egypt, finds that the sector earned revenues of $1.35 billion in 2010 and estimates to reach $2.37 billion in 2015, due to the increasing water demand in the region. In this research, Frost & Sullivan's expert analysts thoroughly examine the following markets: water treatment and desalination, wastewater treatment, water distribution network and wastewater distribution network.
As fresh water availability is forecast to decline in the coming years, utilities are focusing on wastewater treatment and its recycle and reuse. The Egyptian water and wastewater sector has experienced significant investments, especially from private participants, and it holds promise for both domestic and international water and wastewater infrastructure developers. Frost & Sullivan Environmental Research Analyst said “the government approved the public-private partnership (PPP) law in April 2010, and is expected to lay the foundation for privately financed and operated water projects in the waste water and desalination sectors.”
Although the inflow of investments bodes well for the sector, participants will be pressured by the challenges such as the lack of connected sanitary sewers, poor operation and insufficient wastewater treatment facilities. While these inadequacies have led to poor water quality and scant infrastructure and municipal services. Alongside, swelling water demand in the neighboring countries has led to intensifying regional tensions.
The Egyptian Government has acknowledged these issues and intends to resolve them by introducing new water systems in more than 4,600 villages and extending sewer services to all urban areas. These large-scale projects offer ample scope for potential investors and developers in the sector. Meanwhile, technology providers in the sector should seek partnerships with consultants and engineering, procurement and construction (EPC) contractors that are offering cost-effective technologies. (F&S 01.07)
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