|
TOP STORIES
TABLE OF CONTENTS:
1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS
1.1 Strike Ends With Israel's Public Sector Workers Receiving A Staged 5% Wage Rise
Back to top
2: ISRAEL MARKET & BUSINESS NEWS
2.1 Four Israeli Companies Make Top 100 Largest Defense Firms
2.2 Elbit Systems Acquires the UK Company Ferranti Technologies for $31 Million
2.3 InRob Tech & Frontline Robotics Discuss Collaboration on Robotics Defense Projects
2.4 BOS Receives Orders of Over $500,000 for Electronic Components From a U.S. Company
2.5 EFI Opens State-Of-The-Art Research & Development Design Center in Israel
2.6 Battery Ventures and Pitango Venture Capital Invest $17m in Anobit Technologies
2.7 FutureDial & Sun Corporation Acquire Cellebrite
2.8 Orbotech Acquires 3 D - Danish Diagnostic Development
Back to top
3: REGIONAL PRIVATE SECTOR NEWS
3.1 US Exports to Arab World Set to Hit $45b In 2007
3.2 Sabeq Program & US Chamber of Commerce Sign MoU
3.3 Jordan's First Private TV Station Launched
3.4 Al Janabi Group Acquires EFMC in $33 Million Cash Deal
3.5 GigaBeam Further Penetrates Middle East Following Milestone Government Order
3.6 Stratos Expands to Serve Key Oil & Gas Markets in Saudi Arabia
3.7 Drake International Expands to Istanbul, Turkey
3.8 Wmode to Fully Manage Content Services for the First 3G Operator in Cyprus
3.9 Cytori Therapeutics Expands International Network for the Celution System to Greece & Israel
3.10 Wataire Ecosafe Technologies Ships Products to Greece
Back to top
4: ISRAEL MACRO-DEVELOPMENTS
4.1 Hefer Valley Inaugurates Manure-Driven Power Plant
Back to top
5: ARAB STATE & PAKISTANI DEVELOPMENTS
5.1 Study Finds Cellphone Use Below 50% in Jordan
5.2 Kuwait's April CPI Up to 5.37%
5.3 Soaring Food & Housing Prices Spur Saudi Inflation
Back to top
6: TURKISH & CYPRIOT DEVELOPMENTS:
6.1 Greece, Turkey & Italy Sign Gas Pipeline Deal
6.2 Azerbaijan State Oil Company to Build Refineries in Turkey
6.3 Istanbul to Have 250-Km Light Railway By 2012
6.4 Moody's Upgrades Cyprus' Foreign Currency Ratings
Back to top
7: GENERAL NEWS AND INTEREST
*ISRAEL:
7.1 Over 12,000 Babies Born In Israel With Birth Defects Between 2001 - 2005
Back to top
*REGIONAL:
7.2 Lailat al Miraj Celebrated on 11 August
7.3 Pro-Government Candidates Sweep Jordan Municipal Elections
7.4 Iraq Welcomes Soccer Heroes
7.5 YSK Confirms AK Party's Victory
7.6 Turkey's Referendum on Presidential Reform Set For 21 October
7.7 Ankara Mulls Over New Constitution
Back to top
8: ISRAEL LIFE SCIENCE NEWS
8.1 Kamada Signs Long-Term Supply Agreement With A Multi-National European Company
8.2 Endogun Medical Systems Receives CE Mark for Trans-Vaginal Prolapse & SUI Repair Device
8.3 BioControl's CardioFit System for Congestive Heart Failure Is Successfully Implanted
8.4 IOPtima Completes Development of Novel Laser-Based Therapy for Glaucoma
8.5 EMEA Approves Kamada's Phase II Trials of Aerosolized AAT for Cystic Fibrosis Treatment
8.6 Teva Announces Approval of Generic Protonix Delayed Release Tablets, 20 mg and 40 mg
8.7 Oramed Pharmaceuticals Completes $2 Million in Financing
8.8 GammaCan Receives FDA Orphan Drug Designation for Lead Product VitiGam
Back to top
9: ISRAEL PRODUCT & TECHNOLOGY NEWS
9.1 Alvarion & ArrayComm to Deliver Best of Breed Advanced Antenna Technology
9.2 PG&E Signs Agreement With Solel for 553 Megawatts of Solar Power
9.3 Connect One Releases Evaluation Board for Lowest Cost Secure Internet Protocol Controller on the Market
9.4 Gilat's Spacenet Subsidiary Announces Two New Contract Extensions
9.5 Magal Receives an Order of Approximately $4 Million to Protect Gas Pressure Stations
9.6 IncrediMail Launches New Instant Messaging Product Targeting New Demographics
9.7 Hitachi & Alvarion to Cooperate in Developing Mobile WiMAX System
Back to top
10: ISRAEL ECONOMIC STATISTICS
10.1 Israel Had 186,000 Foreign Workers at the End Of 2006
Back to top
In Depth
11.1 ISRAEL: The Case for Normalization
11.2 Arab Middle East: Analysis of the Outlook for Medical Devices
11.3 LEBANON: Best Prospect Sectors
11.4 KUWAIT: Alternative Water Resources
11.5 BAHRAIN: S&P's 'A/A-1' Ratings Affirmed On Strong Financials; Outlook Stable
11.6 OMAN: Drying Wells
11.7 SAUDI ARABIA: Fitch Changes Outlook to Positive
11.8 SAUDI ARABIA: Water Privatization
11.9 TURKEY: Elections - A Vote for Continuity
11.10 TURKEY: Water Deprivation
11.11 TURKEY: Turkey's Cultural & Economic Presence Grows in Kyrgyzstan
11.12 TURKEY: New Gas Pipeline to Link Azerbaijan & Italy Via Turkey
Back to top
1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS
1.1 Strike Ends With Israel's Public Sector Workers Receiving A Staged 5% Wage Rise
On the morning of 26 July, Israel's public sector strike ended after a brief stoppage of less than 24 hours. Minister of Finance Bar-On and Histadrut (General Federation of Labor in Israel) chairman Eini agreed on a 5% pay rise for public sector employees, although this is an initial memorandum of understanding only, with the final agreement signed afterwards. The pay rise will be awarded over a three-year period from 2007 through the end of 2009. Employees will get a 1.5% rise this coming January, followed by a further 1.5% in December, and then 2% in 2009. There will be no retroactive salary payments, and the agreement, in effect, settles all the government's outstanding salary commitments to the public sector for the period 1999 to 2005. The staggered pay rise, which will cost some $1b, will enable the government to take a rational approach to the budgetary proposals for 2008, the biggest challenge facing the Finance Ministry at present. (Globes 26.07)
Back to Table of Contents
2: ISRAEL MARKET & BUSINESS NEWS
2.1 Four Israeli Companies Make Top 100 Largest Defense Firms
Defense News (http://defensenews.com/index.php?S=07top100) announced that four Israeli companies have been ranked among the world's 100 largest defense firms by, a leading industry publication. The firms - Israel Aviation Industry (IAI), Elbit, Rafael and the Israel Military Industries (IMI) - were ranked based on revenues from defense-related activity, though some of the companies also have civilian operations. The IAI dropped from the 31st place last year to 33rd this year, but with annual sales of $1.746b (or 62% of its total sales of $2.813b) remains the largest Israeli company in defense-related sales. Elbit rose from the 46th spot last year to 39 this year, with defense sales of $1.402b, or 92.2% of its total sales. Rafael climbed from the 57th place to the 49th, with sales of $1.056b (all defense related). IMI also climbed the chart, from 92nd place last year to 84th this year, with defense sales of $481.6m. (DN25.07)
Back to Table of Contents
2.2 Elbit Systems Acquires the UK Company Ferranti Technologies for $31 Million
Elbit Systems has acquired the entire share capital of the UK company Ferranti Technologies (FTL) for approximately $31m. FTL is an established supplier of engineering, manufacturing and product support solutions to the Aerospace and Defense markets. FTL designs and manufactures electronic, power and control solutions with emphasis on reliable operation in harsh climatic and electromagnetic environments. FTL's comprehensive customer logistic support services cover: repair, overhaul, modification, integrated logistic support, and post design services. The acquisition of FTL will enable Elbit Systems to provide enhanced access and support to its customers in the UK and Europe. Together with U-TacS, a UAV Systems company and UEL, the UAV engines' company, the acquisition will strengthen the Group's presence in this important market. FTL specializes in the manufacture and design of wide range of electronic power management and control systems for application on air, land and seaborne platforms, including safety critical applications. Haifa, Israel's Elbit Systems (http://www.elbitsystems.com) is an international defense electronics company engaged in a wide range of defense-related programs throughout the world. The Elbit Systems Group, which includes the company and its subsidiaries, operates in the areas of aerospace, land and naval systems, command, control, communications, computers, intelligence surveillance and reconnaissance (C4ISR), advanced electro-optics and space technologies, EW suites, airborne warning systems, ELINT systems, data links and military communications systems and radios. The Group also focuses on the upgrading of existing military platforms and developing new technologies for defense and homeland security applications. (Elbit26.07)
Back to Table of Contents
2.3 InRob Tech & Frontline Robotics Discuss Collaboration on Robotics Defense Projects
InRob Tech has summarized preliminary principles of collaboration with Frontline Robotics, a Canadian company that specializes in the development of systems and technologies for robot platforms. This collaboration will include marketing and joint bidding on defense-related robotics projects. Frontline Robotics develops systems and technologies for unmanned ground vehicles (UGVs) that focus on perimeter security and public safety. InRob Tech and Frontline Robotics have just completed a recent round of talks exploring potential areas of collaboration and cooperation. Yavne's InRob Tech (http://www.inrobtech.com) is an Israeli-based high-tech company specializing in the planning, manufacturing and service support of advanced wireless and remote control systems, operating all types of robots and other vehicles. The Company is Israel's leader in its field, and supports the IDF (Israeli Defense Forces), Israeli police, and other military and civilian companies dealing with security. Founded in 1988, the Company works closely with other high-tech companies to provide the most advanced and comprehensive UGV solutions to the market. (InRob25.07)
Back to Table of Contents
2.4 BOS Receives Orders of Over $500,000 for Electronic Components From a U.S. Company
B.O.S. Better Online Solutions announced that its subsidiary, Odem Technologies received orders from a U.S. customer for electronic components. These orders amount to over $500,000 and are anticipated to be supplied during H2/07. The U.S. customer is in the aviation industry and is a supplier to large aviation groups in the United States. Rishon LeZion, Israel's B.O.S Better Online Solutions (http://www.boscom.com) was established in 1990. BOS operates through two divisions: (1) The Software Division, which provides specialized enterprise software, including IBM System i middleware, data and license management, mobile connectivity and RFID solutions; (2) The Supply Chain Division, which resells electronic systems and components for security, aerospace, networking and RFID. (B.O.S.25.07)
Back to Table of Contents
2.5 EFI Opens State-Of-The-Art Research & Development Design Center in Israel
Foster City, California's EFI, the world leader in color digital print servers, superwide format printers and inks, and print management solutions, announced the opening of their premier inkjet research and development design center in Israel. Due to the significant growth of EFI, new facilities are being created to augment EFI's inkjet quality assurance and research demands. The new site, located in Hod-Hasharon, Israel, approximately fifteen kilometers outside of Tel Aviv, is planning for a mid August opening. The Israeli site was selected to take full advantage of the high quality talent concentration of inkjet engineering talent within the local population. This leading edge technology center will be committed to attracting and retaining the best and brightest the industry has to offer. The new facility's charter will be to develop and validate the performance of new technologies, modules and best-in class printers. The R & D site will incorporate state-of-the-art technologies and encompass office space as well as research laboratories. The new site will maintain continuous expansion and management of numerous projects started within 2007, increasing throughout 2008. EFI (http://www.efi.com) is the world leader in color digital print servers, superwide format printers and inks, and commercial and enterprise print management solutions. EFI's award-winning solutions, integrated from creation to print, deliver increased performance, cost savings and productivity. (EFI30.07)
Back to Table of Contents
2.6 Battery Ventures and Pitango Venture Capital Invest $17m in Anobit Technologies
Battery Ventures and Pitango Venture Capital announced their $17m Series A investment in Anobit Technologies. The round was led by Battery Ventures. Anobit (http://www.anobit.com), based in Herzliya, Israel, is a fabless semiconductor start-up company developing enabling technologies for the large and growing flash memory market. Anobit's technology optimizes the cost and performance of flash memory devices, paving the way for the next generation of memory solutions. The company was founded by three internationally recognized experts in the fields of signal processing, digital communications, system and silicon design.
Since 1983, Battery has been investing in technology and innovation worldwide. The firm partners with entrepreneurs and management teams across technology sectors, geographies and stages of a company's life, from start-up and expansion financing, to growth equity and buyouts. From offices in Boston, Menlo Park and Herzliya, Israel, Battery (http://www.battery.com) manages nearly $3b in committed capital, including its current fund of $750m. Pitango Venture Capital (http://www.pitango.com), the leading venture capital firm in Israel, has been investing in technology entrepreneurs since 1993. With offices in Israel and Silicon Valley California, Pitango currently manages over $1b in committed capital invested in more than 100 companies. Pitango specializes in providing long-term support and value-added services to its portfolio companies, with a focus on seed to late-stage companies in Communications, Network and Storage, Wireless and Mobile, Enterprise Software and Internet Infrastructure, and Life Sciences including Biotech and Medical Devices. (Battery03.08)
Back to Table of Contents
2.7 FutureDial & Sun Corporation Acquire Cellebrite
Sunnyvale, California's FutureDial Incorporated, the leader of mobile device management solutions to wireless carriers around the world, announced that the company and one of its major shareholders - Sun Corporation in Japan - have completed the acquisition of all of the assets of Cellebrite Mobile Synchronization, an Israel-based provider of mobile content transfer solutions previously held by private investors. Financial details of the Cellebrite buyout deal were not disclosed. The acquisition is a concrete step toward executing FutureDial's vision of providing a host of industry-leading mobile content management solutions. Established in 1999, Cellebrite offered contact synchronization and content transfer tools for mobile phones, for use by wireless carrier sales support staff in retail stores. Its UME-24 and UME-36-Pro series are widely adopted by many carrier stores due to their simplicity and ease of operation. (FutureDial03.08)
Back to Table of Contents
2.8 Orbotech Acquires 3 D - Danish Diagnostic Development
Orbotech has signed a definitive agreement to acquire 3 D - Danish Diagnostic Development (DDD), a privately-held Danish company that develops and manufactures gamma cameras for nuclear medicine. DDD is the world's leading manufacturer of cardiac gamma cameras, which it markets primarily in the United States through major industry suppliers that distribute them under their own brands. Orbotech will pay approximately $39m to the stockholders of DDD for the acquisition of all of the outstanding shares of DDD. In addition, Orbotech will pay to the stockholders of DDD an earn-out, capped at approximately $6.5m, based on DDD's performance during the years 2007 and 2008. The acquisition will be financed from internally-generated funds. The Company believes that this transaction has the potential to generate approximately $30m in annual revenues, based on DDD's current product offering and its short term research and development plans; and it is expected to be immediately accretive to Orbotech on a non-GAAP basis.
Yavne, Israel's Orbotech (http://www.orbotech.com) is a world leader in providing yield-enhancing, production support solutions for specialized applications in the supply chain of the electronics industry, principally for printed circuit boards (PCBs) and flat panel displays (FPDs). The Company designs, develops, manufactures, markets and services automated optical inspection (AOI) systems for bare and assembled PCBs and for FPDs, and imaging solutions for PCB production. The Company's innovative AOI, imaging and computer-aided manufacturing (CAM) technologies enable customers to achieve the increased yields and throughput essential to remaining at the forefront of electronics production. (Orbotech06.08)
Back to Table of Contents
3: REGIONAL PRIVATE SECTOR NEWS
3.1 US Exports to Arab World Set to Hit $45b In 2007
US exports to Arab world are set to reach $45b in 2007, a special report from the National US-Arab Chamber of Commerce, said. Sales of American merchandise to the Arab world in 2006 topped $35b, a 28% increase over the previous year. The outlook for 2007 is even more promising, with estimated US sales surging to $45b, according to the Institute for Research: Middle Eastern Policy. US-Arab bilateral trade reached $109b in 2006, an increase of 25% over 2005 levels. Total Arab market imports are expected to reach $405b, an 11% increase over year 2006. According to the report, the single most important factor in the rise of US exports in 2006 was the depreciating dollar, which made US goods very competitive against comparable products from Europe, Asia, and elsewhere. In 2006, the value of the dollar fell about 10% against the euro, and a further decline is taking place in 2007. The continuing weakness of the dollar will cause US global exports to grow by double digits throughout 2007, according to the Economist Intelligence Unit.
The total US deficit in goods and services reached a new milestone in 2006 - a record $763.6b - but this deficit is expected to decrease in 2007 for the first time in six years. In the region, the growth rate of the US trade deficit with the Arab market slowed to 18% in 2006, down from 21% in 2005 and 45% in 2004. The US deficit with the Arab World totaled $39b as energy imports outpaced US manufactured exports to the region. In addition to the comparative weakness of the US dollar, there are other trends that signal impressive increases in US exports in 2007, the report said. Last year, high oil prices translated into greater import purchasing power for Arab energy producing nations and a related “trickle down effect” for non-energy producers in the region. This trend is expected to continue in 2007.
In a related trend, cyclical demand for large items is on the upswing, including civilian aircraft, military systems and border security systems. A review of defense-related equipment and service contract filings with the US Defense Security Cooperation Agency in 2006 indicates a robust demand for US defense contractors over the next few years. The total value of contracts, if all options are exercised, exceeds $16b in hardware and services," the report said. According to the chamber report, the Arab region's consumer market is also helping to drive up US export sales. "Arab consumers have more disposable income than ever, and American products continue to carry significant cachet. On the whole, according to a serial survey conducted by MasterCard, consumer confidence in the region is on the rise. Saudi Arabia ranks highest at 97.3 out of 100, Kuwait ranked second at 94.5, and the UAE rose to 80.0. Consumer confidence scores were down slightly in Lebanon and Egypt." (NUSACC01.08)
Back to Table of Contents
3.2 Sabeq Program & US Chamber of Commerce Sign MoU
The program of the sustainable development for business (Sabeq), funded by the US Agency for International Development (USAID), on 25 July signed with the American Chamber of Commerce in Jordan a memorandum of understanding to support the efforts of the chamber to increase the volume of trade exchange between the Kingdom and the United States of America. The memorandum, signed by the Deputy Director-General of Sabeq Swan and Chairman of the Chamber Khoury, includes linking Jordanian traders and projects with the American market and the removal of obstacles to enhance of environment of laws and regulations in Jordan and to improve the competitiveness of projects to attract investors and promote Jordanian exports in world markets. (Petra25.07)
Back to Table of Contents
3.3 Jordan's First Private TV Station Launched
ATV, Jordan's first private, independent TV station, begins its official broadcast on 1 August. The station will provide its viewers with an array of films, Arabic and foreign dramas, cultural programs and news bulletins. Moreover, the station will cover children's programs, family entertainment, as well as sports shows. ATV will be Jordan's very first time independent news source. The $35.288m project, which is managed by Mohannad Al Khatib, will utilize state-of-the-art broadcasting technologies and deliver a comprehensive program grid that will offer the Jordanian viewer quality content. Al-Khatib has been able to bring together the best pool of talent in Jordan and the region to support the coverage of local, regional and international current affairs. Al-Khatib reiterated that 35 - 40% of ATV's content will be dedicated to news bulletins. ATV has created job and training opportunities for Jordanians. It will also launch a training center to raise professional standards in journalism. (TradeArabia 01.08)
Back to Table of Contents
3.4 Al Janabi Group Acquires EFMC in $33 Million Cash Deal
Dubai, U.A.E.'s Al Janabi Group announced that its investment arm, Al Janabi Ltd., has acquired Arlington, Virginia based EFMC, LLC in a $33m cash transaction. EFMC, LLC, is a developer of international Technology Exchange Centers (TEC) used to provide best practices and methodologies in emerging and developed market infrastructure programs such as oil/gas, electricity, roads and bridges, agriculture, healthcare and municipal planning. Al Janabi Group is a global, diversified company that provides vital products and services to customers in six business segments: Construction, Oil/Gas, Healthcare, Engineered Platforms, Real Estate Development and Investments through its financial arm, Al Janabi Ltd. With 2006 revenue of $1.2b, the Al Janabi Group has offices in Amman, Baghdad and Dubai. (Al Janabi30.07)
Back to Table of Contents
3.5 GigaBeam Further Penetrates Middle East Following Milestone Government Order
Durham, N.C.'s GigaBeam Corporation has received a purchase order for two WiFiber links from a key reseller for the government of the Kingdom of Saudi Arabia. The Saudi order represents the opening of another major Middle Eastern market, including the Kingdom of Bahrain, with significant revenue potential and demand for ultra high speed access including Internet connectivity that does not require the underground digging necessary for terrestrial fiber optics. The order further validates GigaBeam's aggressive commercialization strategy to penetrate major metropolitan areas around the world with next generation wireless technology which is able to bypass existing telecom infrastructure at speeds equal to 1,000 DSL lines. The Company expects to drive additional revenues and earnings from sales to the Middle East and North Africa region which is expected to complement the contribution from existing and projected next generation Wireless Local Exchange Carriers. GigaBeam's WiFiber product ushers in a new era of communications by allowing customers to bypass the restrictive telecom oligopoly and connect directly to any city's fiber optics hub or Point-of-Presence (POP). (GigaBeam 03.08)
Back to Table of Contents
3.6 Stratos Expands to Serve Key Oil & Gas Markets in Saudi Arabia
Bethesda, Maryland's Stratos Global Corp. announced a strategic agreement to expand its ability to serve important E&P customers in Saudi Arabia. Stratos has entered into an agreement with Detecon Al Saudia Co. to increase business opportunities throughout the Middle East. DETASAD is affiliated with Deutsche Telekom Group and is one of the Middle East's leading providers of telecommunications services. The agreement provides Stratos with access to DETASAD's teleports in Riyadh, field service providers and an ultra-modern network operations center in Riyadh. Elsewhere in the region, Stratos recently expanded its business operations in Dubai by relocating its office to the new Al Shatha Tower in Internet City. Stratos is a trusted leader for vital communications, offering a powerful and extensive portfolio of remote communications products, including mobile and fixed satellite and microwave services. (Stratos06.08)
Back to Table of Contents
3.7 Drake International Expands to Istanbul, Turkey
Drake International, a wholly owned subsidiary of Drake Management, announced the opening of an office in Istanbul, Turkey. The Turkish office will cover industry sectors across Eurasia, the Middle East and Africa. It will monitor macro economic and political situations, thus providing Drake with strategic local and regional intelligence. Based in New York, Drake Management is an SEC-registered Investment Adviser that employs over 100 professionals and manages more than $10b across three global, multi-sector fixed income hedge funds — the Drake Absolute Return Fund, the Drake Global Opportunities Fund and the Drake Low Volatility Fund — plus a variety of managed accounts and mutual funds for traditional institutional investors. (Drake30.07)
Back to Table of Contents
3.8 Wmode to Fully Manage Content Services for the First 3G Operator in Cyprus
CALGARY, Alberta's Wmode, the developer and operator of the ClearMode managed service, has been selected by the Cyprus-based mobile service provider Areeba to fully manage all of Areeba's content services. Areeba will now be offering ring tones, graphics, video clips, chat services and games for their mobile subscribers. Wmode will assist Areeba to further differentiate themselves as a 3G rich multimedia mobile service provider. Their fully managed content services will provide Areeba with the opportunity to have a competitive advantage in the Cyprus market with the latest digital media and help further differentiate them as being the only true 3G multimedia provider in Cyprus. This agreement aligns with Wmode's global strategy as the world leader in complete mobile content distribution. Areeba is a subsidiary of the South Africa-based multinational telecommunications company MTN Group. Areeba made its appearance in the Cyprus market on July 12, 2004 and was the first GSM operator to launch the 3G network in the island in December 2004. (Wmode 02.08)
Back to Table of Contents
3.9 Cytori Therapeutics Expands International Network for the Celution System to Greece & Israel
San Diego, California's Cytori Therapeutics expanded its international distribution network for the Celution System in reconstructive surgery. The additional distributors will cover Greece and Israel. These groups will oversee product sales and provide physician education and training in their respective territories. Cytori selected its distribution partners based upon experience in the reconstructive surgery market, track record of introducing new technologies, proven sales performance in their respective regions, and specialized regulatory and training expertise. The new distributors are Arthrosis S.A., which will serve Greece, and AMI Technologies, which will serve Israel. Cytori's Celution System is an innovative medical device that removes a patient's own regenerative cells from their adipose (fat) tissue in about an hour. The cells can then be delivered to the same patient at the bedside in the same surgical procedure. (Cytori 31.07)
Back to Table of Contents
3.10 Wataire Ecosafe Technologies Ships Products to Greece
Vancouver, British Columbia's Wataire Ecosafe Technologies announced that one container load of 250 WW11-4010 Home/Office units has been shipped to Envirosource Hellas, the Company's exclusive distributor for Greece. In addition, Envirosource will also receive 110 individual air purification units that work in conjunction with the atmospheric water generation systems manufactured by Wataire Ecosafe Technologies. Depending on specific operational requirements, the Home/Office unit can be either fitted with silver impregnated pre- and post-carbon filters or a zeolite medium, further indication of Wataire's flexibility to meet a variety of situations with its patented technology for safer drinking water solutions. Envirosource has also been appointed as the exclusive distributor for Cyprus, an island that, like Greece, provides optimal climatic conditions for peak operational effectiveness of the Company's drinking water systems. Wataire Ecosafe Technologies is now in discussion with an increasing number of well-established companies expressing the desire to represent the Company in both the residential market as well as the market for large scale units that can produce between 2,500 to 5,000 liters of drinking water on a daily basis. (Wataire01.08)
Back to Table of Contents
4: ISRAEL MACRO-DEVELOPMENTS
4.1 Hefer Valley Inaugurates Manure-Driven Power Plant
Tambour Hefer Ecology has begun delivering electricity to the national grid from its new power plant driven by manure and other organic waste located in Hefer Valley, near Hadera. Tambour Hefer Ecology is a joint venture of Granite Hacarmel Investments subsidiary Global Environmental Solutions (GES) and Hefer Ecology & Co-Desalination Cooperative Society. As reported by Globes, within a year, the power plant will generate 2-2.4 megawatt/hour (MW/h). Initial output is 1.6 MW/h, of which 1.3 MW/h is delivered to the national grid and 300 KW/h is used to operate the facility itself. The facility was built to comply with the stricter environmental protection regulations applying to local authorities. The Hefer Valley Cooperative Society was ordered to reduce pollutants generated by the communities' 12,000 dairy cows, and decided to build the manure-driven power station to solve the problem. GES said that the Hefer Valley plant is the first large-scale plant of its kind in Israel, and one of the first in the world. The plant utilizes 600 tons of manure a day. The manure is sterilized and the solid and liquid waste are then processed to produce methane, which drives the generators to make electricity. Sources at Granite Hacarmel said the project cost $10m, including a $2m grant from the Ministry of Agriculture under its program to reform Israel's dairy industry. GES, formerly Tambour Ecology was founded in 1997 through the merger of three companies. (Globes 31.07)
Back to Table of Contents
5: ARAB STATE & PAKISTANI DEVELOPMENTS
5.1 Study Finds Cellphone Use Below 50% in Jordan
Significantly fewer Jordanians use mobile phones than previously estimated, according to a recent Arab Advisors Group survey. The study, conducted by the Amman-based research and consultancy company, reveals that less than half the population use cellular phones. Multiple line use by the same individuals and the presence of expatriates outside official population figures set Jordan's Effective Mobile Penetration Rate at around 48%. This figure is 26% lower than the 74.2% penetration rate given by mobile operators at the end of 2006, based on the number of lines (4.15m) divided by the population. Based on the survey findings, the ratio of the number of lines to the number of mobile users is 1:4. Applying this ratio to the reported total number of mobile lines, the actual number of individual mobile subscribers in Jordan was estimated at 2.9m subscribers by end of 2006. The survey says the trend of having more than one line is mainly driven by the desire of individuals to capitalize on the different plans, offers and promotions of the operators. A total of 28.5% of cellular users have two lines while 5.7% have three lines. Just over 58% of respondents who have more than one mobile line state cost saving as the reason. (JT03.08)
Back to Table of Contents
5.2 Kuwait's April CPI Up to 5.37%
Kuwait's annual consumer price inflation rose to 5.37% in April from 5.15% in March, driven by higher prices for food, clothing, housing and transport, government data showed on 28 July. The All Items Consumer Price Index rose to 115.8 points on April 30 compared with 109.9 points on April 30 last year. In March, the index was at 116.4 points compared with 110.7 the year earlier. Housing costs rose by 4.1% in April, transport and communication costs by 10.7% and food prices rose by 5.4%, the data showed. Clothing prices gained 6.3%. The Gulf Arab state dropped a dollar peg on May 20 and adopted a basket of currencies to contain the impact of dollar weakness in driving up inflation from non-dollar imports. Kuwait pays for more than a third of its imports in euros. (Reuters29.07)
Back to Table of Contents
5.3 Soaring Food & Housing Prices Spur Saudi Inflation
Inflation in Saudi Arabia rose to a five-month high of 3.1% in June as food and housing costs climbed, official data showed on 31 July. The cost of living index rose to 104.4 points in June, up 0.2% compared with May, the Saudi Central Department of Statistics said, without giving a comparative figure for June last year. The index was at 101.3 points in June last year, according to data posted on the website of the Saudi Arabian Monetary Agency (Sama). The department said the rise in June in inflation stemmed mainly from food products and rent prices. Inflation has been gaining this year as windfall oil revenues boosted Saudi Arabia's economy, increasing demand for housing. Inflation could drop in July and August as Saudis travel outside of the kingdom for annual vacations. Inflation reached 3.6% in January, Sama data show. The annual inflation rate dropped for the first time in nine months in March, when it slipped to 2.86%, from 3% in February. Inflation should reach 3% this year after expected spikes during September, when the Islamic fasting month of Ramadan begins, and December, when the annual Islamic pilgrimage to Mecca happens. (GDN01.08)
Back to Table of Contents
6: TURKISH & CYPRIOT DEVELOPMENTS:
6.1 Greece, Turkey & Italy Sign Gas Pipeline Deal
On 26 July, Turkey, Greece and Italy signed an agreement on constructing a pipeline to bring natural gas from central Asia to European markets by 2011. The signing ceremony took place in Rome. The agreement seals months of negotiations aimed at piping natural gas from the Caucasus to Western Europe through Turkey and Greece. The Turkish-Greek link, initially planned to be finished in June, is now expected to begin operating in late August, while construction on the Greek-Italian connector - owned by Italy's Edison and Greece's DEPA - is expected to begin next year. The pipeline network would include a 212-kilometer (132-mile) undersea connection from Greece to Italy, and is expected to carry 11.5 billion cubic meters of gas a year into Greece, most of it for re-export. The gas is expected to be of non-Russian origin, after strong U.S. pressure to ensure that Europe gets its growing gas imports from multiple suppliers. A separate project, the South Stream pipeline, would bring Russian gas through Bulgaria to Europe.
This marks the latest of several international agreements boosting regional energy cooperation. In March Greece, Bulgaria and Russia signed an agreement to build an oil pipeline from Bulgaria to Greece to carry Russian crude to the Mediterranean, bypassing Turkey's congested Bosporus Straits. Previously, in Ankara, Sioufas signed a protocol with Turkish Resources Minister Guler providing for Greek purchases of electricity from Turkey at peak periods. Guler signed the agreement which came after another deal with Iran last month to transport some 30 billion cubic meters of Iranian and Turkmen natural gas westward to Europe. (TNA26.07)
Back to Table of Contents
6.2 Azerbaijan State Oil Company to Build Refineries in Turkey
On July 13, the Turkish Energy Markets Regulatory Authority (EMRA) approved a joint proposal by the State Oil Company of Azerbaijan (SOCAR) and Turkey's Turcas Petrol to build a refinery near the Turkish port of Ceyhan. This was the second large-scale, successful initiative by SOCAR this year. The first was the acquisition of the Kulevi Oil Terminal in Georgia. SOCAR formed a joint venture with Turcas Petrol (SOCAR-Turcas Energy) in December 2006 to construct a $4b oil refinery near in Ceyhan. SOCAR and Turcas applied to the Turkish Energy Markets Regulatory Authority for the approval of the project in April and have been anxiously waiting for the agency's response. Most of Azerbaijan's oil is transferred to western markets via the Baku-Tbilisi-Ceyhan (BTC) pipeline, which ends in the port of Ceyhan. So the selection for the new refinery site was not accidental. The proposed refinery will have an annual capacity of 10 million tons, and the necessary investments will be made gradually over the next six years. By 2010, Azerbaijan will be producing 65 million tons of crude oil and more than 10 billion cubic meters of natural gas per year. Natural gas production will reach 20 billion cubic meters by 2015. Hence, SOCAR is likely to continue its international expansion as the country gets involved in other regional projects such as Nabucco and a Turkey-Greece-Italy pipeline. (JF26.07)
Back to Table of Contents
6.3 Istanbul to Have 250-Km Light Railway By 2012
Plans for the transport infrastructure in Turkey's largest city include a 250-kilometer light railway and possibly a third bridge crossing the Bosporus by the year 2012, according to an announcement by Mayor Kadir Topbas on 6 August. Saying that an additional rail system in the city would significantly relieve the city's traffic problems, Topbas said the system would be extended to 562 kilometers in later years. Topbas also expressed belief that Istanbul needs more bridges. Saying that the government was currently considering an international project to build a third bridge over the Bosporus strait, he said Marmaray, a light railway currently under construction to cross the strait underwater, will answer a major requirement of the city. Referring to Marmaray as “the project of the century,” he said another tube channel crossing the straits under the sea would be built for “vehicles with rubber tires,” though suggested no timescale for this. He also said that the Da Vinci bridge project, a footbridge over the Golden Horn designed by Leonardo Da Vinci in the beginning of the 16th century, was going to be resurrected. (Zaman07.08)
Back to Table of Contents
6.4 Moody's Upgrades Cyprus' Foreign Currency Ratings
Moody's Investor Service has revised higher the credit rating of Cyprus on foreign currency from “A2 Positive” to “A1 Positive”. Moody's also upgraded credit rating of Cyprus as regards domestic currency to ‘A1 Positive' from ‘A2 Positive', which was its previous evaluation. The Ministry of Finance considers Moody's revised ratings as a positive development that “would strengthen the government's credit worthiness and further improve the terms of financing”. The Moody's evaluation took into consideration the adoption of the euro on January 1, 2008, the viable growth rate, the constraint of inflation in relatively low levels, the stability of exchange rate and the fact that Cyprus is in the process of fiscal reforming that contributes to the continuous improvement of public finances. According to the Ministry of Finance, Moody's considers Cyprus' accession to the eurozone a positive step which will contribute to the improvement of the economy and further advance of establishments and citizens. Moody's also believes that the adoption of the euro will lead to a convergence of Cyprus Pound interest rates to the rates of the euro, create more favorable conditions for financing of both the public and the private sector, eliminate the currency cost and risk of the transactions in euro, help attract foreign investments, secure more transparency as regards pricing and finally pave the way for easier access to foreign markets. Moody's refers also to the challenges the local economy must face such as the dependency on oil imports for its energy needs in association to the increasing prices of oil globally, the small size of the economy and the fact that the main contributors to the Gross Domestic Product (GDP) are but a few sectors of financial activity, a fact which contains risks for the economy as a whole in case a certain sector is facing a crisis. This also threatens the competitiveness of Cyprus' economy. (Moody's01.08)
Back to Table of Contents
7: GENERAL NEWS AND INTEREST
*ISRAEL:
7.1 Over 12,000 Babies Born In Israel With Birth Defects Between 2001 - 2005
More than 12,000 babies were born in Israel with major birth defects between 2001 and 2005. About 1,400 of these children died as a result of their birth defects according to figures released on 30 July by the Health Ministry. According to the report, 1.86% of all children were born with serious birth defects in 2005. The ministry said that despite the advances in technology in recent years, which allow the detection of embryos with serious problems during pregnancy, the number of children born with serious problems is still high. In recent years there has actually been an increase in the number of babies born with a problem that causes a defect in the heart walls, and those with another birth defect called hypospadias, in which the urethra opens on the undersurface of the penis. The encouraging news in the figures is the drop in the number of babies suffering from neural tube defects (NTDs), in which the neural tube fails to close properly. This decrease is attributed to the wide use of folic acid by pregnant women. The report also highlights an increase of between 10 and 20% in the number of birth defects in the Arab sector compared to that in the Jewish population. Certain birth defects are seen to be increasing because of improvements in testing; defects that were not identified previously are now revealed. In terms of major birth defects, the situation in Israel is similar to that in the Western world. But Israel has a high percentage of women who do not undergo genetic testing due to religious beliefs.
Back to Table of Contents
*REGIONAL:
7.2 Lailat al Miraj Celebrated on 11 August
On 11 August (the 27th day of the month Rajab in the Islamic calendar), Moslems will celebrate Lailat al Miraj (Miraç Kandili in Turkish), is the Muslim festival celebrating the Isra and Mi'raj (Night Journey) of Muhammad. Moslems believe Muhammad's heart was purified by two archangels and filled him with knowledge and faith in preparation to enter the seven levels of heaven. Mohammed then traveled from Mecca to the Temple Mount in Jerusalem on the winged horse, the Buraq, accompanied by the angel Gabriel. He then ascended to heaven met with the prophets and eventually with G-d. From this journey, Muslims believe, the command for five daily prayers (Salat) was given. The celebrations around this day tend to focus on children and the young. Children are gathered into a mosque and are told the story of the Isra and Mi'raj. After prayer (Salat, where the children can pray with the adults if they wish) food and treats are served. Unlike the other Islamic holidays, which center more around the family, Lailat al Miraj is more about the community as a whole and events tend to be more about bringing the community together.
Back to Table of Contents
7.3 Pro-Government Candidates Sweep Jordan Municipal Elections
On 1 August, pro-government and independent candidates swept local elections in Jordan, including the first-ever vote for city mayors. Despite a boycott by the Islamic Action Front, the country's largest opposition party, four candidates from the fundamentalist group won municipal council seats. The municipal election was the first time Jordanians were directly choosing their mayors, previously appointed by the king. Jordan's 1.9 million eligible voters were also electing all members of their municipal councils, choosing from 2,325 candidates for the 1,022 seats. Previously, the king appointed half the members. The IAF sought to boost its position by tarnishing the state's reputation ahead of the more significant parliamentary elections in November. The IAF is the political arm of the Muslim Brotherhood movement and has 17 seats in the 110-member parliament. But the group has lost much of its clout in recent years for failing to deliver on pledges to address rampant unemployment and poverty. Voters in Amman elected only half of the capital's 68-member municipal council while King Abdullah II was still to appoint the other half, along with the mayor. The move seemed to reflect concern over the opposition IAF's strong following among the capital's poor. King Abdullah II has touted the municipal polls as part of democratic and social reforms. Women were allotted 20% of council seats, in contrast to the 2003 vote when only five were selected. The voting age was also lowered by one year to 18 to allow greater participation. Rana Khalaf al-Hajaya, a female engineer, was elected mayor of the southern town of Hassa -- unprecedented for an area considered a Bedouin tribal hub, where men traditionally dominate the political scene. Women also showed up at the polls in higher numbers. Final results had women's turnout outside the capital at 65%, compared to 59% for men. (AP01.08)
Back to Table of Contents
7.4 Iraq Welcomes Soccer Heroes
On 4 August, Iraq's soccer champions arrived in Baghdad to emotional homecoming, following their victory in the Asian Cup, played in Indonesia on 29 July. Hundreds of Iraqis managed to negotiate a series of security checkpoints in blistering summer heat to reach the airport in the hope of catching a glimpse of their heroes. The team, nicknamed the Lions of Mesopotamia, was whisked to the "Green Zone" for an official ceremony inside the heavily fortified compound that protects U.S. and Iraqi authorities. Their victory triggered nationwide euphoria. After the final whistle in their 1-0 defeat of heavily favored Saudi Arabia, at least seven people were killed by stray bullets as joyous Iraqis fired rifles into the air. Iraqis hailed the multi-ethnic team, which includes members of different religious sects, as proof the country could overcome the divisions that have led to bloodshed. Newspapers and TV commentators contrasted the players with the country's feuding and ineffective politicians. Since the victory, the team has been feted in boisterous celebrations in Dubai and Jordan.
Back to Table of Contents
7.5 YSK Confirms AK Party's Victory
On 30 July, Turkey's Supreme Board of elections announced the final results of the country's general elections for the 550-seat Turkish parliament, confirming the ruling party's victory. The results for Turkey's 23rd term parliamentary elections are announced. Prime Minister Recep Tayyip Erdogan's AKP took 341 of the 550 seats, down from 351 in the outgoing parliament. According to the final results Republican People's Party (CHP) won 112 seats while Nationalist Movement Party (MHP) will have 70 seats. It is also explained that 26 independent deputies entered Parliament this year while there is also an empty seat as an elected deputy died after the election in a traffic accident. (TNA30.07)
Back to Table of Contents
7.6 Turkey's Referendum on Presidential Reform Set For 21 October
A referendum on constitutional reforms including electing the president by popular suffrage will take place on 21 October, Turkey's Electoral Council announced. The referendum will not affect the election of outgoing President Ahmet Necdet Sezer's successor, who is expected to be elected by parliament in August as the current law requires. The reforms were initiated by the ruling Islamist-rooted Justice and Development Party (AKP) following political turmoil that blocked the election of its candidate, Foreign Minister Gul, as head of state. Insisting that Gul, a former Islamist, is not truly committed to Turkey's secular system, the opposition boycotted two parliamentary sessions in April and May, robbing the house of the quorum required to hold a presidential vote. Tensions increased with a warning by the army that it is ready to defend the secular order amid mass anti-government demonstrations. Prime Minister Erdogan was forced to call early general elections on 22 July, in which his party won a landslide victory. The new parliament is expected to elect a successor to Sezer, who has stayed on as acting head of state since his seven-year term expired in May, by the end of August. The reforms also call for a once-renewable, five-year presidential mandate instead of the current single, seven-year term, and general elections every four years instead of five. The government originally planned to hold the referendum simultaneously with the 22 July elections, but legal hurdles delayed the approval of the amendments package. (TN31.07)
Back to Table of Contents
7.7 Ankara Mulls Over New Constitution
A new constitution, more democratic, more civilian and more simple, is top of the ruling Justice and Development Party (AKP) government's agenda, which emerged as the victor of the July 22 parliamentary elections. A high level AKP official told the media that the party's priority was to transform Turkey from a representative to a participatory democracy. Almost all political parties believe there is a need for a new constitution, but the composition of the new constitution is where they disagree. For example, article 83 of the Constitution provides full immunity to deputies. The Republican People's Party (CHP) and the Nationalist Movement Party (MHP) want to abolish the immunity while the AKP favors a partial amendment. The AKP in the past said they wanted to abolish all immunities, including those enjoyed by civil servants and military officers. AKP officials stated that a new commission in Parliament will be established to work on these amendments. The AKP had the same intention during the previous Parliament but was unsuccessful due to the CHP's refusal to participate. The new constitution will also reshape the president's duties and responsibilities. The government intends to transfer most of the presidential powers to the prime minister and the cabinet. The president's right to appoint university rectors will be revoked, with rectors being appointed through university elections. (TDN01.08)
Back to Table of Contents
8: ISRAEL LIFE SCIENCE NEWS
8.1 Kamada Signs Long-Term Supply Agreement With A Multi-National European Company
Kamada has signed a long-term agreement with a multi-national European company for the supply of raw material required for manufacturing AAT [Alpha-1-Antitrypsin], Kamada's flagship product for the treatment of Congenital Emphysema and other lung diseases. AAT is now in advanced clinical trials in the U.S. under the supervision of the FDA, and in Israel. The agreement will guarantee Kamada a steady supply, over the next several years, of raw material conforming to international standards. The human plasma-derived raw material used by Kamada must comply with strict standards set by the FDA and/or EMEA. The suppliers are also required to meet the highest standards of production and manufacturing control. Kamada's proprietary production process had already been accepted by the medical community and the company's partners, and Kamada adapts its purification methods to the quality of plasma provided. AAT is used to treat Congenital Emphysema, a disease caused by an inborn deficiency of the Alpha1 Antitrypsin protein, and other lung disorders. Kamada has developed IV and aerosolized formulations for AAT, which are both in advanced clinical trials towards registration in Europe and in the U.S. Kamada (http://www.kamada.com), based in Ness Ziona, Israel, manufactures a line of highly-safe specific immunoglobulins and other plasma-derived therapeutics, using sophisticated chromatographic purification technology. Licensed and marketed in more than 15 countries, several of these specialty biopharmaceuticals hold registered and pending patents and are in clinical trials. (Kamada31.07)
Back to Table of Contents
8.2 Endogun Medical Systems Receives CE Mark for Trans-Vaginal Prolapse & SUI Repair Device
Endogun Medical Systems has received CE-Mark for its single-incision, trans-vaginal EndoFast Reliant device for repair of Pelvic Organ Prolapse and Stress Urinary Incontinence (SUI). In September 2006, Endogun was also granted FDA clearance to market the EndoFast Reliant for soft-tissue attachment in the USA. The CE Mark is a key milestone towards bringing Endogun's Prolapse and SUI product to market. Endogun has a simple procedure which may improve safety and reduce the overall costs associated with prolapse and SUI repair. Endogun's product is aimed at offering a simpler and safer procedure for Prolapse and SUI repair, which is performed entirely intra-vaginally. HaOgen, Israel's Endogun Medical Systems (http://www.endogun.com) was founded in March 2004 to offer improved soft tissue attachment technology and products to the world of Minimally Invasive Surgery (MIS). It offers procedures that are easier for surgeons to use and safer for patients than today's options, Endogun aims to significantly improve the quality and outcome of many minimally invasive procedures in the world of urogynecology and urology. (Endogun01.08)
Back to Table of Contents
8.3 BioControl's CardioFit System for Congestive Heart Failure Is Successfully Implanted
BioControl Medical announced that cardiologist and surgeons at University Hospital Mannheim in Germany and at Ospedali Riuniti di Bergamo in Italy have successfully implanted the CardioFit device in the first patients to be enrolled at those sites in BioControl's international, multi-center, open-label clinical study of the CardioFit system for the treatment of advanced congestive heart failure. The CardioFit system works by applying electrical impulses to the vagus nerve. A sensing electrode in the right ventricle detects the patient's heart rate and is used to control nerve stimulation. The study is now in progress at IRB approved sites in Europe, Israel and Australia. Yehud, Israel's BioControl (http://www.biocontrol-medical.com) develops and markets advanced implantable devices for the treatment of autonomic disorders, conditions whereby the autonomic nervous system ceases to function properly, resulting in a disruption to the control of involuntary body processes. The devices enable controlled electrical stimulation of various nerves to achieve therapeutic results. (BioControl01.08)
Back to Table of Contents
8.4 IOPtima Completes Development of Novel Laser-Based Therapy for Glaucoma
IOPtima has completed development of its OT134 device, a novel laser-based therapy for the treatment of glaucoma. The second-generation OT134 is based on IOPtima's smart laser-based technology known as LNPDS (CO2 Laser Non-Penetrating Deep Sclerectomy) that has already been successfully tested on 23 glaucoma patients in clinical trials. The OT134 upgrades the previous prototype with improved efficacy and ergonomic features. IOPtima plans to begin later this year a multinational long-term human clinical trial testing the OT134's efficacy at leading ophthalmology centers around the world. IOPtima's unique approach removes the risk of perforating the membrane and minimizes the risk of perforating the scleral tissue because its CO2 laser-based system is self-terminating once the desired scleral thickness has been achieved. This elegant self-regulation is possible because the CO2 laser essentially stops ablating as soon as it comes in contact with the intra-ocular percolated liquid, which is what occurs as soon as the laser reaches the optimal residual intact layer thickness. The OT134 is expected to make non-penetrating deep sclerectomy surgery accessible to all eye surgeons in a safe, fast and cost effective manner.
Ramat Gan, Israel IOPtima (http://www.bio-light.co.il/portfolio) focuses on the discovery, development and commercialization of innovative and proprietary technologies for the treatment of glaucoma - a common eye disease that leads to loss of sight. The company has developed an innovative non-penetrating, easy-to-use system, based on CO2 laser technology, for the treatment of glaucoma. IOPtima has completed successful human clinical trials on 23 subjects with its first generation device. IOPtima believes that its innovative new OT134 system will offer significant advantages over traditional therapies for glaucoma, such as simplicity, higher efficacy, lower risks to the patient, fewer side effects and lower costs. The availability of a safe surgical procedure is expected to increase the number of surgical interventions. IOPtima is a subsidiary of Bio-Light Life Science Investments (http://www.bio-light.co.il), a management and holding company specializing in biomedical technologies. (IOPtima 31.07)
Back to Table of Contents
8.5 EMEA Approves Kamada's Phase II Trials of Aerosolized AAT for Cystic Fibrosis Treatment
Kamada has been granted approval by the European Agency for the Evaluation of Medicinal Products (EMEA) for phase II clinical trials of the inhaled version of its Alpha-1 Antitrypsin [AAT] product for treating Cystic Fibrosis (CF). The first phase of the clinical trials is now on course, showing good intermediate results. Kamada's AAT aerosolized form has been designated an Orphan Drug for the treatment of CF and Congenital Emphysema, both in Europe and the US. This designation grants Kamada a range of support mechanisms such as research fund support, tax incentives, tolerance on fees and 7-10 year exclusive distribution rights if the company's product is first on the market. Cystic Fibrosis is a common genetic lung disorder affecting approximately 30,000 patients in the United States and 70,000 worldwide, with about 1,000 new cases diagnosed every year. Kamada (http://www.kamada.com), of the Weizmann Science Park, Ness Ziona, Israel, manufactures a line of highly-safe specific immunoglobulins and other plasma-derived therapeutics, using sophisticated chromatographic purification technology. Licensed and marketed in more than 15 countries, several of these specialty biopharmaceuticals hold registered and pending patents and are undergoing advanced clinical trials. (Kamada 31.07)
Back to Table of Contents
8.6 Teva Announces Approval of Generic Protonix Delayed Release Tablets, 20 mg and 40 mg
Teva Pharmaceutical Industries announced that the U.S. FDA has granted final approval for the Company's Abbreviated New Drug Application (ANDA) to market its generic version of Wyeth's Protonix (Pantoprazole Sodium) Delayed Release (DR) Tablets, 20 mg and 40 mg. Teva's Pantoprazole Sodium DR Tablets are the AB-rated equivalent of Protonix DR Tablets, a product indicated for short term treatment of erosive esophagitis associated with GERD, maintenance of healing of erosive esophagitis and for treatment of hypersecretory conditions. As one of the first companies to file an ANDA containing a paragraph IV certification for this product, Teva has been awarded a 180-day period of marketing exclusivity. A patent infringement suit was brought against Teva in May 2004 involving Teva's paragraph IV certification to U.S. Patent No. 4,758,579 related to Teva's Pantoprazole Sodium products. On July 31, 2007, a hearing was held in the U.S. District Court for the District of New Jersey regarding Wyeth's motion for a preliminary injunction in that action. Teva has agreed not to launch its products until the earlier of a denial of the preliminary injunction or September 7, 2007. Teva Pharmaceutical Industries (http://www.tevapharm.com), headquartered in Israel, is among the top 20 pharmaceutical companies in the world and is the leading generic pharmaceutical company. The company develops, manufactures and markets generic and innovative human pharmaceuticals and active pharmaceutical ingredients, as well as animal health pharmaceutical products. (Teva02.08)
Back to Table of Contents
8.7 Oramed Pharmaceuticals Completes $2 Million in Financing
Oramed Pharmaceuticals announced the closing of a financing of over $2m into the Company by a number of leading private investors with strong connections to the pharmaceutical industry. This investment ensures that Oramed has enough funds to reach completion of Phase 1 trials, which are expected by mid-2008. This investment marks a milestone for Oramed's stability, allowing the company to fully focus on its research and development efforts and complete its Phase 1 product trials. Phase 1A trials presently entail safety studies to ensure that there are no negative side effects in healthy humans. Phase 1B will help formulate the proper dosage for diabetic patients in the future. Oramed Pharmaceuticals (http://www.oramedpharma.com) is a Jerusalem, Israel based company focused on the development of oral delivery solutions based on proprietary technology. Diabetes is one of the most rapidly growing diseases in the world and is one that requires constant and often unpleasant monitoring and drug therapy regimen. Oramed is currently developing an orally ingestible soft gel insulin capsule for the treatment of diabetes. The Company is also pursuing the development of oral delivery solutions for other drugs and vaccines. (Oramed06.08)
Back to Table of Contents
8.8 GammaCan Receives FDA Orphan Drug Designation for Lead Product VitiGam
GammaCan International announced its lead anti-cancer immunotherapy, VitiGam™, has received Orphan Drug designation by the U.S. Food and Drug Administration (FDA) for the treatment of Stage IIB to Stage IV metastatic melanoma. GammaCan anticipates filing an IND with the FDA for a Phase I/II clinical trial by year-end, and initiate clinical testing of VitiGam in early 2008. Orphan Drug designation entitles GammaCan to exclusive marketing rights in the United States for VitiGam for up to seven years should GammaCan be the first company to receive marketing approval for this therapeutic drug product. Under the Orphan Drug Act (ODA), the FDA will not accept or approve other applications from other sponsors to market an identical medicinal product for the same therapeutic indication for the seven-year period. In addition, the designation allows GammaCan to apply for a waiver from the FDA of certain filing and user fees required by the Prescription Drug User Fee Act (PDUFA). Kiryat Ono, Israel's GammaCan (http://www.GammaCan.com) develops proprietary immunotherapy and related approaches to treat melanoma and other cancers. GammaCan's platform patented technology is based on the use of IgGs (gamma-immunoglobulins), a safe, relatively non-toxic human plasma-derived product used to treat a variety of immune deficiencies and autoimmune diseases. (GammaCan07.08)
Back to Table of Contents
9: ISRAEL PRODUCT & TECHNOLOGY NEWS
9.1 Alvarion & ArrayComm to Deliver Best of Breed Advanced Antenna Technology
Alvarion and SAN JOSE, California's ArrayComm announced their ongoing technology partnership for integration of ArrayComm's multi-antenna signal processing software (A-MAS) into Alvarion's 4Motion's Radio Access Network Solutions. Alvarion's all-IP OPEN WiMAX ecosystem opens the door to complete, best-of-breed networks that optimize all elements of a WiMAX network – from core equipment and service offerings to end-devices and even the end-user's experience. Alvarion's WiMAX platform will leverage ArrayComm's A-MAS Advanced Multi-Antenna software in order to offer 2 to 4 times more coverage and spectral efficiency than the WiMAX Forum's baseline profiles, through a unique combination of Beamforming, MIMO and adaptive interference cancellation, while maintaining full profile and standards compliance. Tel Aviv, Israel's Alvarion (http://www.alvarion.com) is the world's leading provider of innovative wireless broadband network solutions enabling Personal Broadband to improve lifestyles and productivity with portable and mobile data, VoIP, video and other services. Alvarion is leading the market to Open WiMAX solutions with the most extensive deployments and proven product portfolio in the industry covering the full range of frequency bands with both fixed and mobile solutions. Alvarion's products enable the delivery of personal mobile broadband, business and residential broadband access, corporate VPNs, toll quality telephony, mobile base station feeding, hotspot coverage extension, community interconnection, public safety communications, and mobile voice and data. (Alvarion 25.07)
Back to Table of Contents
9.2 PG&E Signs Agreement With Solel for 553 Megawatts of Solar Power
Pacific Gas & Electric has entered into a landmark renewable energy agreement with Solel-MSP-1 to purchase renewable energy from the Mojave Solar Park, to be constructed in California's Mojave Desert. The project will deliver 553 MW of solar power, the equivalent of powering 400,000 homes, to PG&E's customers in northern and central California. The Mojave Solar Park project is now the world's largest single solar commitment. The plant utilizes Solel's patented and commercially-proven solar thermal parabolic trough technology. Over the past 20 years, the technology has powered nine operating solar power plants in the Mojave Desert and is currently generating 354 MW of annual electricity. When fully operational in 2011, the Mojave Solar Park plant will cover up to 6,000 acres, or nine square miles in the Mojave Desert. The project will rely on 1.2 million mirrors and 317 miles of vacuum tubing to capture the desert sun's heat. Solel Solar Systems (http://www.solel.com) of Beit Shemesh, Israel, the world's largest solar thermal company, is the parent company of Solel-MSP-1. Solel's leading technology utilizes parabolic mirrors to concentrate solar energy onto its patented UVAC 2008 solar thermal receivers. The receivers contain a fluid that is heated and circulated, and the heat is released to generate steam. The steam powers a turbine to produce electricity, which can be delivered to a utility's electric grid. The electricity generated by Mojave Solar Park will use some of the transmission infrastructure originally built for the now dormant coal-fired Mojave Generation Station to deliver the power to PG&E's customers. (PG&E 25.07)
Back to Table of Contents
9.3 Connect One Releases Evaluation Board for Lowest Cost Secure Internet Protocol Controller on the Market
Connect One released II-EVB-600, an evaluation board for programming the iChip CO2064, Connect One's low-cost, small footprint Internet Protocol (IP) controller that targets cost- and resource-constrained machine-to-machine (M2M) applications, where encryption and security is required. The II-EVB-600 supports many upper layer Internet protocols using either AT+i commands or the iChipConfig Utility, and can be used for evaluation and development of secure WiFi, LAN, cellular or dial-up networking, offering developers maximum flexibility in connectivity. The II-EVB-600 acts as a complete stand-alone platform which enables developers to fully test out, develop and debug the functionality of the CO2064's firmware without any modifications to the customer's development environment. The II-EVB-600 facilitates the CO2064 iChip's tight memory management. To minimize footprint, CO2064 iChip offers 256 kBytes of memory, enough to run all networking stacks, and does not need dedicated flash while using the available system flash for storing the device firmware. The chip features an open architectural design where developers choose the Internet protocols required for their applications. Established in 1996, Connect One (http://www.connectone.com) is widely regarded as the device networking authority, with many innovative firsts to its credit. The company manufactures semiconductors and device servers that facilitate reliable and robust Internet Protocol-based communication for everyday devices. Connect One is privately owned, with offices in San Jose, CA, Hong Kong, and Kfar Saba, Israel. (Connect One 31.07)
Back to Table of Contents
9.4 Gilat's Spacenet Subsidiary Announces Two New Contract Extensions
Gilat Satellite Networks announced that its wholly-owned subsidiary, Spacenet Inc, has been awarded two new contract extensions. Spacenet has signed a contract extension with American Municipal Power Ohio (AMP-Ohio) to provide a high-speed VSAT data network. AMP-Ohio, a non-profit association representing member municipal electric communities in Ohio, Pennsylvania, Virginia, West Virginia and Michigan, supplies wholesale power and provides technical services to its members. The Spacenet Connexstar service provides remote control for more than 150 transmission substations and carries vital data to AMP-Ohio's SCADA network. With its initial VSAT deployment in 2004, AMP-Ohio replaced its aging SCADA system based on leased lines with Spacenet's Connexstar satellite network. In addition, Spacenet announced that it has extended its enterprise network services contract with Fazoli's Restaurants, a leading quick-service Italian restaurant chain. Based in Lexington, Kentucky, Fazoli's operates more than 300 restaurant locations nationwide.
Founded in 1981, Spacenet (http://www.spacenet.com) is a leading provider of high-performance satellite and hybrid terrestrial networking solutions for business, government and home/small office customers in the United States and worldwide. Spacenet has a longstanding tradition of industry leadership and innovation, and today serves more than 100,000 network endpoints for customers including many Fortune 500 companies and major government agencies. Petah Tikva, Israel's Gilat Satellite Networks (http://www.gilat.com) is a leading provider of products and services for satellite-based communications networks. (Gilat31.07)
Back to Table of Contents
9.5 Magal Receives an Order of Approximately $4 Million to Protect Gas Pressure Stations
Magal Security Systems recently received an order for a turnkey project of approximately $4m from one of the leading oil and gas companies in the world, which its headquarters is located in Europe, to protect two gas pressure stations. This turnkey project includes the company's DTR-2000 Taut Wire Intrusion Detection System with a built-in camera and illuminator, CCTV cameras and the MTC-1500 Thermal Day & Night Surveillance System, all integrated and controlled by Magal's DreamBox system. DreamBox is a state-of-the-art embedded hardware and software product which in this project integrates intelligent video analysis, digital video recording and a video matrix switcher under its built-in security management system. Yehud, Israel's Magal Security Systems (http://www.magal-ssl.com) is engaged in the development, manufacturing and marketing of computerized security systems, which automatically detect, locate and identify the nature of unauthorized intrusions. Magal also supplies video monitoring services through Smart Interactive Systems, Inc., a subsidiary in the U.S. (Magal01.08)
Back to Table of Contents
9.6 IncrediMail Launches New Instant Messaging Product Targeting New Demographics
IncrediMail has released a closed beta version of the Company's new instant messaging product under the code name, “Project Messy.” A previously selected population of IncrediMail users has been chosen to test both the product and application performance within a controlled environment. This is the Company's initial step toward entering the world of instant messaging (IM). Project Messy is intended to offer unique animations, sound effects, hilarious “winks” or nudges that shake the whole interface screen in a fun way, and a wider selection of emoticons compared to the other IM applications, in a sleek, clean interface. Through a personalized approach, the vibrant graphics have been designed to reach new younger demographics. Project Messy is an add-on to existing IM clients, so users of popular IM applications will not need to switch programs. The beta release is compatible with Microsoft's Windows Live Messenger (formerly named MSN messenger) and is based on a patent pending technology of “Contextual Content” making creative content in IM "Instant". In applying IncrediMail's business model and leveraging future advertising opportunities, IncrediMail believes that Project Messy has the potential for providing substantial revenues.
Tel Aviv, Israel's IncrediMail (http://www.incredimail-corp.com) is a software company specializing in internet consumer products and services. The Company focuses on designing and marketing an integrated suite of customized and entertaining Internet software products for the consumer marketplace. The company's products include an email application and a wallpaper and screensaver manager. (IncrediMail06.08)
Back to Table of Contents
9.7 Hitachi & Alvarion to Cooperate in Developing Mobile WiMAX System
Hitachi Communication Technologies, with its headquarters in Tokyo, Japan, and Alvarion have agreed to develop Broadband Mobile Wireless Access System using Mobile WiMAX technology jointly in Japan and overseas market. The Ministry of Internal Affairs and Communications has developed the license policy of 2.5 GHz band. WiMAX is considered as the most likely candidate for Broadband Mobile Wireless Access Systems. To establish WiMAX technology, the base station, which can transmit broadband data stably, and the mobile management technology, which can realize seamless handover between base stations, are needed. The main goal of this agreement is that Hitachi Com and Alvarion will develop total system solutions, combined with the base station technology of Alvarion, which is globally a leading company in WiMAX and broadband wireless systems, with the mobile gateway technology, construction and maintenance technology of Hitachi Com, which has the rich experience of 3G Mobile Radio Network System.
With more than 3 million units deployed in more than 150 countries, Tel Aviv, Israel's Alvarion (http://www.alvarion.com) is the world's leading provider of innovative wireless broadband network solutions enabling Personal Broadband to improve lifestyles and productivity with portable and mobile data, VoIP, video and other services. Alvarion is leading the market to Open WiMAX solutions with the most extensive deployments and proven product portfolio in the industry covering the full range of frequency bands with both fixed and mobile solutions. (Alvarion07.08)
Back to Table of Contents
10: ISRAEL ECONOMIC STATISTICS
10.1 Israel Had 186,000 Foreign Workers at the End Of 2006
Israel had 186,00 foreign workers at the end of 2006, including 102,000 with work visas and 84,000 who had entered the country on tourist visas, the Central Bureau of Statistics reports. Some 33,000 new foreign workers entered Israel legally during 2006, 46% of them women. The foreign workers came from 100 countries, with 12 countries providing 96% of the total. The breakdown of foreign workers by country of origin in 2006 included 9,000 Ghanaians, 6,400 Philippinos, 3,500 from Russia and other CIS states, 3,000 Chinese, 2,800 Nepalese, 2,600 Romanians, 1,500 Turks, 1,000 Indians and 400 Bulgarians. Another 300 foreign workers with work visas came from the US, Germany, the UK and other developed countries. (CBS30.07)
Back to Table of Contents
In Depth
11.1 ISRAEL: The Case for Normalization
Morgan Stanley's Serhan Cevik (http://www.morganstanley.com) commented that a low inflation rate does not reflect the aggregate demand-supply balance, in our view. “Global inflation is back in vogue, but Israel still has deflation. The annual inflation rate was -0.7% in June, compared to 3.5% last year. Indeed, over the last 12 months, deflationary pressures deepened and moved inflation from an average of 3.3% in the first half of 2006 to 0.9% in the second half and then as low as -1.3% this year. As a result, with inflation running even below the lower bound of the target range, the Bank of Israel cut interest rates from 5.5% in last autumn to 3.5% this spring. In our view, there is one simple reason behind the wave of deflation, and that is the shekel's appreciation. The dollar's weakness and economic improvements in Israel led to the shekel's revaluation, pushing currency-linked prices lower. For example, the housing sector — accounting for 22% of the consumer price index — recorded a sudden shift in inflation from around 6% in the first half of last year to -6% this year. Consequently, the headline figure moved from above 3% into the deflationary territory, although the economy has kept growing at an above-trend pace. This is why we have argued for focusing on underlying trends. While currency-linked components of the CPI recorded a 4.5% decline in the first five months, consumer prices untouched by currency fluctuations posted a 3.2% increase. In other words, excluding the exchange rate pass-through effect, inflation has already been above the central bank's target range.
The shekel's normalization will remove the veil over hidden inflation. The details of the CPI show inflation hidden behind the appreciation of the shekel. Therefore, as the shekel normalizes and reaches a new equilibrium (around 4.10 against the US dollar), we expect a sustained increase in consumer price inflation. This shift in inflation dynamics is already underway. Last month, for example, the CPI posted a 0.7% increase - the highest reading in the last five years. As a result, the annual inflation rate moved from -1.3% in May to -0.7% in June and the cumulative inflation rate reached 1% in the first half of the year. Although it is still in low territory, we see the accumulated pressure bringing inflation to around 2.5% by the end of this year.
Global pressures and the rise in domestic demand will push inflation higher. Higher energy prices present a well-known threat, but the world is also facing the risk of food price inflation. With the shekel's normalization, global pressures are likely to have a greater effect on the behavior of inflation in Israel. However, our main concern on the inflation front is domestic developments. Real GDP growth has averaged 5% over the last three years and accelerated to 6.3% in the first quarter of this year - significantly above the economy's potential growth rate of around 4.5%, according to our estimates. That means there is no longer a disinflationary output gap and underlying inflation pressures will likely build up over time. Indeed, the composition of growth is now dominated by domestic demand, thanks to low interest rates and strong growth in employment and disposable income. Consumer spending grew at an annualized rate of 11.8% in the first quarter, up from 4.8% last year, and the incoming data point to further strengthening in the remainder of the year.
Economic conditions do not justify accommodative interest rates, in our view. The Israeli economy shows no sign of moderation, with all the indicators pointing to an inflationary surge in domestic demand. For example, both wholesale and retail sales recorded strong growth (increasing by 8.5% and 6.8%, respectively) in the second quarter. In our view, the message is clear: interest rates are significantly below the neutral level and therefore inconsistent with the aggregate demand-supply balance in the economy. Indeed, the build-up in inflation is already evident in consumer prices excluding the exchange rate pass-through effect. This is why we welcome the Bank of Israel's decision to raise short-term interest rates by 25bp to 3.75% and expect further tightening (about 50-75bp) in the remainder of the year. In our opinion, normalizing interest rates would help keep the economy in a ‘sweet spot' of high growth and low inflation and support the shekel's secular appreciation trend. (MS26.07)
Back to Table of Contents
11.2 Arab Middle East: Analysis of the Outlook for Medical Devices
Research and Markets has announced the addition of “The Outlook for Medical Devices in the Middle East” to their offering.
Saudi Arabia
The Saudi economy relies heavily on the price of oil; if prices are high, the markets remain strong. If, however, oil prices fall, the markets contract and the economy slows down. It has also been known to cause late payment to creditors. Under the Sixth Development Plan, the healthcare sector expanded rapidly and the government hopes to sustain that growth by investing in construction and other projects. In 2005 alone, $448m was allocated to the construction and renovation of health facilities. It must be noted however, that tertiary sector hospitals are highly advanced; the Development Plans are generally aimed at improving primary healthcare provision. Saudi Arabia has no official standard for medical products, but the majority of physicians are trained to Western standards and will want to use the best equipment available. Foreign companies must have a local agent and tariffs apply to some medical equipment.
Kuwait
Kuwait is a small, oil-rich state in the Persian Gulf. It is one of the more politically liberal states in the region and has strong ties with the West. The country has a well-developed hospital sector, much of which was redeveloped following the conflict in 1990/91; hospital renovation is ongoing although primary care provision is still lacking. Around 80% of the healthcare sector is run by the government, either directly by the Ministry of Health or through facilities administered by public oil companies. Kuwait has an unusual demographic profile, with the ‘local' population outnumbered by overseas workers; nearly three-quarters of the workforce is of foreign origin. However, expatriate workers tend to be highly-skilled, bringing modern, Western techniques to the Kuwaiti healthcare system, therefore enhancing its development.
Egypt
The Egyptian healthcare system has been in a transitory period for some time, and while this should eventually result in a more modernized, efficient system, the delay has allegedly caused standards to slip in the public sector. Recent economic uncertainty has restricted the growth of the market. In addition to this, some government policies, aimed at transforming the economy into one that is increasingly open, globablized and market-oriented, have been unpopular, slowing the pace of reform and restricting the market still further. Egypt imported $229.3m of medical devices in 2005, more than half of which was medical equipment (HS9018). Imports have fluctuated in recent years, but followed a general upward trend.
Jordan
Jordan is a small but strategically located country in the Middle East, which borders Israel, Syria, Iraq and Saudi Arabia. Although it lacks the oil reserves of many of its neighbors and is relatively poor in comparison, it boasts good links with the West and is a key player on the local political scene. Both the government and private sector are committed to upgrading and modernizing Jordan's healthcare provision. The country has a reputation in the region for its high standards of services provided. New public and private hospitals have been expanding and upgrading in recent years, providing good opportunities for companies in the provision of medical equipment. There is little in the way of domestic production although there are a number of local manufacturers producing basic medical equipment and consumables, including Arab Medical & Scientific Alliance, Burgan Drugstores, Jordan Medicare Corporation and Medeast Import and Consultancy Agency. (Espicom 27.07)
Back to Table of Contents
11.3 LEBANON: Best Prospect Sectors
While last year's July war and ensuing political instability have severely impacted Lebanon's economic growth and led to a slowdown in investments, three sectors have been singled out as best prospect sectors by a US report on Lebanon 2007. The guide pointed to Lebanon's "many investment-enabling strengths" that had encouraged foreign companies to set up offices in recent years, including "a free market, a highly dollarized economy, the absence of controls on the movement of capital and foreign exchange, a highly educated labor force, a good quality of life and limited restrictions on investors".
The three "best prospect sectors" were named as information and communication technology (ICT), pharmaceuticals and insurance.
Lebanon has "the fundamental building blocks" to become a regional centre for technology, the paper said. These building blocks are a highly-educated and multilingual workforce, a strong private sector, world-class advertising firms, and multilingual media content providers and web portals. In addition, the Lebanese government's plans to regulate and upgrade its "outdated and costly" ICT infrastructure in the near future will offer significant opportunities to foreign investors, according to the guide.
With regard to pharmaceuticals, the local pharmaceutical manufacturing industry was qualified as "weak", with 92-95% of pharmaceuticals products imported to Lebanon through over 50 pharmaceutical importing firms. Lebanon, the report states, is the leading importer of pharmaceutical drugs in the Levant region and its market generates around $400m every year in retail sales. According to Armand Phares, the president of the Lebanese Syndicate of Pharmaceutical Importers, the health sector has potential since "health is essential to human beings, under all conditions - war and peace." He told OBG that in Lebanon's case, the sector is quite well organized, which makes it easier to spotlight weaknesses. He said updating regulations was one area of weakness but that in this regard, the Syndicate had been working "very hard" with the minister for issuing an applicative decree that would improve the regulatory environment for importers and manufacturers. "The text is more or less ready," Phares told OBG and is waiting for the minister to approve and sign it before being sent to the Council of Ministers for approval. Phares said he is optimistic tangible progress will be achieved in the "next few weeks".
With regard to the insurance sector, the report stated, "after having sustained indirect losses due to the war in July-August 2006, insurance companies are on the way to a speedy recovery". Predictions from within the sector point to a growing need for all kinds of policies, especially those of health and life. "Moreover, due to a large number of reconstruction projects that are already underway, policies covering construction work are also in great demand".
Elie Nasnas, president of the Association of Lebanese Insurance Companies (ACAL), told OBG there is great potential for growth in life policies if incentives are implemented. ACAL figures show that between 2000 and 2005, life premiums increased by 136% to reach $202m while non-life premiums increased over the same period by 35% to reach $427m. According to ACAL, applying a historic combined average growth rate (CAGR) leads to a total market exceeding $1.04bn in 2010. In a country that has only 25% of its population insured, other areas of potential spotlighted by Nasnas include fire policies (decennial insurance) for new buildings, medical policies and liability insurance such as third party liability, professional liability and professional malpractice (doctors, lawyers, engineers).
On a general level, Nasnas pointed to the pioneering role of Lebanese insurers in their operations in the Arab region over the past five decades and to the professionalism of Lebanese insurers in keeping their companies and commitments to clients throughout 30 years of wars and economic crises.
Another investment area with potential identified is the raft of projects that will see the light of day through the Council for Development and Reconstruction (CDR). Potentially $2bn worth of projects will be executed in the next three years, mostly thanks to foreign loans, while there are promises for an additional $1bn for post-war reconstruction. The CDR has completed a preliminary draft of a 12-year vision plan, as well as a five-year investment plan (2006-2011) that includes a list of projects by sector including water supply, wastewater, solid waste, health, transportation, education, power and telecom. The plan has been coordinated with concerned ministries and has been submitted to the Council of Ministers for approval. (OBG30.07)
Back to Table of Contents
11.4 KUWAIT: Alternative Water Resources
As the summer temperatures push the mercury ever higher, Kuwait's water network is coming under increasing pressure, focusing attention on the search for new water resources. The Oxford Business Group cited a Kuwait Institute for Scientific Research (KISR) report that said Kuwait has the lowest per capita natural water availability in the world. With a yearly rainfall averaging only 110mm and limited groundwater access, Kuwait relies heavily on the desalination industry for fresh water needs. However, with population growth pushing 4.5% annually and a surge in industrial and residential water usage, the existing water network is beginning to strain under the demand.
According to Mutaz Jafar, CEO of Kuwait-based National Water Technologies, an estimated 90% of Kuwait's water resources come from seawater and desalination, with the majority of the remainder extracted from groundwater wells. However, he told OBG that in an arid climate like Kuwait, there is a need to find alternative resources, as limited water supply impacts the expansion and development of the economy.
One of the ways in which Kuwait is looking to boost its water network capacity is through recycled water and water treatment. Renovated wastewater, which can provide a renewable source of water, currently accounts for less than 5% of the total water supply. As water consumption and treatment costs are both extremely high, any attempt to lower them offers the potential to reduce pollution and increase water supply. Properly treated wastewater not only reduces the pressure on fresh and brackish water supplies but also provides a renewable high-quality effluent that, in some cases, can meet the World Health Organization (WHO) standards for potable water.
Perhaps the biggest step Kuwait has taken in this direction has been the construction of a $390m water reclamation facility in Sulaibiya. Designed and managed by a consortium led by Kuwait-based Kharafi group and GE Water and Process Technologies, the 30-year build-operate-transfer (BOT) project has treated around 100m gallons per day of municipal wastewater from Kuwait City and the surrounding areas since it opened. The water, which meets the standards for drinking purposes, is used primarily for agricultural and industrial use. The plant, the largest of its kind in the world, has been so successful that the government is in the process of enlarging its capacity to 159m gallons daily, at which point it is predicted to contribute up to 26% of Kuwait's overall water demand.
With assistance from the UN Food and Agricultural Organization (FAO), Kuwait has also been working to boost the usage of treated wastewater in the country for non-potable uses in the agricultural sectors. Brackish water is no longer sufficient to meet the demand for non-potable usage. As a result, a research centre was established with the FAO to provide data and technical expertise on ways in which Kuwait could increase its non-potable water supply without straining the existing capacity.
According to Pasquale Steduto, the chief of water resources at the FAO, "Kuwait is the first country in the region to have introduced the treatment of wastewater for agricultural purposes," which makes their research into recycled water essential for the whole Gulf region.
Carwash stations have also come under scrutiny. An estimated 2.5m gallons worth of freshwater are used daily in Kuwait's over 140 carwash stations. The effluent from the car washes often contains high levels of petroleum-based pollutants and hazardous materials, which, if left untreated, can be damaging to the marine environment. In a pilot project conducted by the KISR at the Doha research plant in Kuwait, tests showed that up to 75% of the water can be reclaimed and treated for additional usage at the car wash and in other industrial settings. Such industrial water reclamation offers a lot of opportunities for boosting Kuwait's renewable water supply, said Jafar.
Although wastewater treatment is of growing interest, the government is also looking to bulk up its desalination capacity. The majority of Kuwait's desalination plants, which date back to the 1950s, use the multi-stage flash (MSF) procedure, whereby seawater is converted into steam before being distilled. The simple layout of MSF plants increases their attractiveness, despite the high energy costs associated with thermal processes. Last year, the government awarded South Korea's Doosan Heavy Industries with a $250m contract to construct the final phase of an additional eight MSF desalination plants, with a capacity of 12.5m gallons per day, in the Subiya desalination complex. When those plants come online, expectedly by the end of the year, the total MSF desalination capacity will grow to 500m gallons per day. Furthermore, the ongoing refurbishment of existing plants should extend their lifespan for an additional 10 years. (OBG03.08)
Back to Table of Contents
11.5 BAHRAIN: S&P's 'A/A-1' Ratings Affirmed On Strong Financials; Outlook Stable
On 26 July, Standard & Poor's Ratings Services (http://www.standardandpoors.com) affirmed its 'A' long-term and its 'A-1' short-term sovereign credit ratings on the Kingdom of Bahrain based on strong financials. The outlook is stable. At the same time, Standard & Poor's affirmed its 'AA-' transfer and convertibility assessment on Bahrain.
"The ratings reflect the government's continued high net financial asset position and strong international alliances," said Standard & Poor's credit analyst Luc Marchand. "These factors provide a good counterbalance to current high geopolitical risks and the Bahraini economy's vulnerability to external shocks."
The main supporting factor for the ratings is the strong government net asset position, which is forecast to reach about 65% of GDP by year-end 2007 and to remain at more than 55% of GDP beyond 2010. Standard & Poor's expects there to be a general government surplus (including extra-budgetary expenditures) of 2.0% of GDP in 2007. According to Standard & Poor's forecast, a steady increase in government expenditures and decreasing oil prices will result in a balanced budget in 2008 and a small deficit of up to 2.2 % in GDP in 2009-2010.
Structural reforms have proceeded rapidly in recent years, particularly with regard to privatization and opening public sector industries to private sector operators.
Geopolitical risks remain high and act as a constraint on the ratings. These risks are mitigated, however, by strong international alliances and substantial government assets.
"The strong fiscal and economic performance, underpinned by structural reforms, counterbalances continuing high geopolitical risk," said Mr. Marchand.
An increase in the public sector net asset position, a strengthening of fiscal reforms, and further improvement in fiscal transparency could have a positive effect on the ratings. Conversely, the ratings would come under pressure if there was a significant deterioration in fiscal or economic performance, or if reforms were to be postponed. The latter could occur if the regional political climate--particularly in Iraq or Iran--were to deteriorate, as this could raise concerns about security and domestic social stability in Bahrain. The banking sector has played an important role in Bahrain's economic growth, so a correction in the stock market and some oversupply of business premises could be a potential risk to the economy. Standard & Poor's considers, however, that the impact on the banking system and the real economy of any correction would be limited. (RatingsDirect 26.07)
Back to Table of Contents
11.6 OMAN: Drying Wells
The Oxford Business Group reported that the latest figures from Oman's Ministry of National Economy on the country's oil production and exports have served to underline what experts and officials have known for some time: that the industry is in decline. On August 3, the ministry issued a statement showing that the sultanate's oil exports between January 1 and May 31 had fallen by 6.5% compared to the same period in 2006. In total, up to the end of May, Oman shipped 95.57m barrels of oil this, as against 102.22m barrels for the same period last year.
Production was also down, with just 13.73m barrels extracted for the first five months of the year, a fall of 5.3% as against the January to May total for 2006, with average daily production down from 753,000 to 713,000.
The ministry statement also showed a shift in export destinations, with China increasing its imports of Omani crude by 18% to just under 43m barrels by the end of May, while Thailand cut its imports from the sultanate from the 25.8m barrels for the first five months of 2006 to 16.38m barrels for the corresponding period this year, a reduction of 36.5%. The falls, in line with figures released every month by the ministry, shouldn't come as a surprise. In mid-January, Nasser Bin Khamis Al Jashmi, the undersecretary of Oman's ministry of oil and gas, warned there would be another fall in output this year, a trend that started in 2001.
A ministry report for the four months ending April, released on June 23, also indicated that overseas sales were down 10% against the same period last year. While dwindling output is the main factor behind falling exports, the June figures are likely to reflect a one off blip brought on by Cyclone Gonu, which struck the sultanate on June 3. Though the storm caused massive damage and took the lives of at least 49 people, the country's oil infrastructure was left unscathed. Nevertheless, it did cause a three-day delay in loading at Oman's ports, with operations suspended at the Mina al Fahal oil terminal as a precautionary measure. According to Omani officials cited in a report on June 11, Gonu cost the country $200m in lost export revenue, a figure that will show up in the ministry's next report on production and sales.
While production and exports may be slipping, the government and Petroleum Development Oman (PDO), the sultanate's main exploration and production company, are working to both maximize existing resources and develop new ones. PDO has been one of the regional leaders in using new technology to try and maximize production from ageing wells. Last year, the government said it would invest $10bn to improve energy production, with much of this being directed to Enhanced Oil Recovery (EOR) projects to increase yields from otherwise unproductive or marginal wells. The company, which is responsible for more than 80% of Oman's oil production, is making increasing use of techniques such as gas injection to force more oil out of drying wells. PDO hopes that through the use of EOR and the opening up of other fields, it will be able to lift daily production to 800,000 barrels per day.
On the reverse side of the coin, while Oman's oil production and exports are waning, natural gas output is on the rise. In January, the ministry of oil and gas projected a 14% increase in gas production for 2007, with output reaching 72.9m cu meters. Though this figure may prove to be optimistic, with production only up 7.2% in the first five months of the year according to the ministry of national economy report, the increase in gas output may compensate for falling oil sales. While Oman still has enough oil reserves to keep the tankers filling for many years, it has long been planning for the day when the wells run dry. Much of its oil revenue is being directed into programs to diversify the economy so it can pass seamlessly from a net exporter to a net importer. Though new finds and improved technology will help stave off that day, Oman knows it is coming. (OBG07.08)
Back to Table of Contents
11.7 SAUDI ARABIA: Fitch Changes Outlook to Positive
On 31 July, Fitch Ratings (http://www.fitchratings.com) changed the Kingdom of Saudi Arabia's Outlook to Positive from Stable. Its ratings are affirmed at Long-term foreign and local currency Issuer Default (IDR) 'A+' and Short-term foreign currency IDR 'F1'. The Country Ceiling is affirmed at 'AA-' (AA minus).
"High oil prices continue to strengthen the government's domestic and external balance sheets," said Charles Seville, Associate Director in Fitch's sovereign team. Further improvements in credit ratios will increase Saudi Arabia's resilience to an oil price shock and be positive for the ratings. The government is using its fiscal surplus - which reached 25% of GDP in 2006 - to pay down domestic debt, build external assets and invest in infrastructure to enhance economic and social development.
Domestic debt on a consolidated general government basis fell to just 8.4% of GDP last year, one of the lowest ratios of any rated sovereign. Saudi Arabia is also one of the very few sovereigns with no external debt. With a large part of the fiscal surplus being invested overseas, the net public external creditor position is forecast to increase by $40bn by end-2007 to 108% of current account receipts, a position that is surpassed only by countries rated in the 'AA' category or above, including Kuwait. Non-reserve external assets reached $250bn at end-2006, with Saudi Arabia being more transparent about these holdings than other GCC countries.
"Every dollar that Saudi Arabia adds to its external assets improves its ability to cope with any future oil price shock," said Mr. Seville. "At such high rating levels, the net external creditor position is an essential counterweight to the economy's dependence on oil, with oil and gas accounting for half of total GDP."
A sharp fall in oil prices - however remote this might appear given the tightness of the global oil market - is still the main economic risk. Saudi Arabia is much better positioned for such a fall than at the time of the last oil price shock in 2001. Its per capita oil endowment is less strong than some more highly-rated countries in the Gulf, and per capita income is still only half the average for the 'AA' category. However, Saudi Arabia is the world's largest oil exporter and it can influence oil prices.
Private investment, both domestic and foreign, is being encouraged by ambitious economic reforms and development plans. The business environment also compares favorably with most peers in the 'A' category and many in the 'AA' category. The non-oil private sector helped drive overall GDP growth to over 4% in 2006, despite flat oil output. Fitch expects a number of major projects to sustain private sector growth, even if oil prices moderate. These investments should help diversify the economy and help reduce unemployment. In addition, the state-owned oil company is in the middle of a major program of investment that will raise production capacity by 1.3 mbd to 12.5 mbd, allowing it to meet higher demand while maintaining spare capacity and confirming Saudi Arabia's pre-eminent position as an oil exporter.
King Abdullah's decision in October 2006 to create the Allegiance Institution to decide the future path of the succession alleviates domestic political uncertainty and is positive for the rating. Security has also improved since a wave of extremist attacks in 2003-04. (Fitch Ratings31.07)
Back to Table of Contents
11.8 SAUDI ARABIA: Water Privatization
Saudi Arabia, the largest economy in the Middle East, is looking to public private partnerships (PPPs) as a means to produce and distribute water throughout the kingdom. The Oxford Business Group comments that the water privatization plans, similar to ones being looked at in the electricity market, are taking place because the current level of performance is "below the generally accepted standard." This according to Water and Electricity Minister Abdullah al-Hussayen.
Demand for water in Saudi Arabia, which desalinates more water than any other country, is increasing rapidly due to the kingdom's burgeoning population. The birth rate, 46% higher than the global average, is an important factor in the government's need to improve supply for the future. Currently, consumption is estimated at 240 liters per person day. Waste is excessively high and the government is keen to utilize private investment in a bid to minimize water cuts and meet demand, which has surged five-fold in the past five years and is expected to increase to 12 cu meters by 2030.
The Supreme Economic Council's (SEC) recent approval for bylaws for the National Water Company, a state-owned company that will carry out its operations on a commercial basis, gave a boost to the reform process, and in turn is expected to improve the overall performance of the sector. The decision to restructure the ground and sewage water sector was made by the SEC, chaired by King Abdullah, in September 2006. The reform aims to separate water and wastewater operations on a city-by-city basis. The private sector will be offered wastewater treatment plants on contract terms, which have yet to be confirmed.
Al-Hussayen told delegates at the ministry of water and electricity road show in Jeddah on July 23, "PPPs are widely adopted internationally and we perceive these are the best option for our local conditions." The ministry carried out an in-depth study of international PPP models, looking at the experiences other countries had with PPPs. Based on this study, the ministry then chose the one they felt best suited the requirements of the kingdom while also recognizing the criteria for attracting suitable partners.
Al-Hussayen said that with the government's commitment to the reform process and the incentives the kingdom could offer to the private sector, the option of investment was an attractive one for potential partners. "We are aware that potential operators are looking for a reasonable return on their investment, fair risk allocation between rigorous legal, institutional, regulatory and financial framework, a stable economic environment and a transparent bidding process," he said.
From an investor's perspective the utility market in Saudi is eye-catching. Researchers at Saudi Arabia's Samba Financial Group rank the utilities segment as the third most attractive area for investors. This prediction is expected to improve with the utilities market to hit the number one spot for investor attractiveness in the next five years.
Presently, private investment has already been utilized in Saudi Arabia, via independent water and power projects, with the first expected to begin operation in 2009. The bid for Shuaiba Phase 3 was given to a consortium of Saudi and Malaysian companies. The estimated cost of the project is $2.5bn, 60% of which will be private investment. With an expected daily capacity of 900MW and 880,000 cu meters of water, it will ensure that homes in Mecca, Jeddah, Taif and Al-Baha on the western coast have a sufficient supply of water.
The government hopes that by in bringing private sector knowledge and expertise, it can take advantage of more efficient work practices, which should have a positive impact on service. "We are confident that the involvement of private operators will help improve performance in the key areas identified," said al-Hussayen. He said that the contracts were expected to bring in new investment for more efficient replacements and rehabilitation of aging assets as well as the provision of new assets. (OBG01.08)
Back to Table of Contents
11.9 TURKEY: Elections - A Vote for Continuity
Tel Aviv's Institute for National Security Studies noted that in Turkey's recent elections, almost half the voters opted for continuity and the ruling Justice and Development Party (AKP) won an impressive parliamentary majority (340 out of 550 seats in parliament) that will enable it to govern without coalition partners. With close to 47% of the popular vote, AK even surpassed its performance (34%) in the previous elections, although its parliamentary representation will actually drop somewhat because of the electoral system and the entry of an additional party into parliament. The other party represented in the outgoing parliament, the veteran Republican People's Party (CHP) founded by Mustafa Kemal Ataturk, remains the second-largest party; it maintained its levels of support and received about 21% of the popular vote.
Still, the election results also foretell some changes. One potentially significant development stems from the ability of the right-wing Nationalist Action Party (MHP) to garner 14% of the vote (more than the 10% threshold) and therefore to return to parliament after a one-term absence. MHP's growing popularity can be traced to stepped-up Kurdish terrorism in recent years and the resulting demand for aggressive Turkish action in northern Iraq. At the same time, however, the Democratic People's Party (DTP), which represents Kurdish interests and which failed in previous elections to pass the electoral threshold, this time ran independent candidates who managed to secure more than 20 seats. These members of parliament will work to promote Kurdish cultural rights and can be expected to clash constantly with the MHP.
Another ramification of the elections is a further decline in the political status of the Turkish Army. Despite the Army's warnings that the AK was undermining the secular principles of Turkey, the public gave AK another vote of confidence. The Army remains a potent force in defense of Turkish secularism and the precedents it has established – it has overthrown four governments since the establishment of the Turkish Republic – constitute a warning to the AK not to deviate too sharply from the Kemalist tradition of separating state and religion. That may help explain why Recep Tayyib Erdogan, the popular leader of AK, declared in his victory speech that the Party would not compromise the basic principles of the Turkish Republic. Nevertheless, the Army has actually emerged in a weaker position. Early parliamentary elections had been prompted by an earlier crisis over the election by Parliament of a new president, during which the Army had published a memorandum on its Internet site warning against the choice of a pro-Islamist candidate (Erdogan's deputy, Foreign Minister Abdullah Gul) with a headscarf-wearing wife. The virtual ultimatum of the Army was widely interpreted as an attempted coup against AK and actually strengthened support for the Party which, was seen as victim both of Army intervention and of the controversial ruling by the Constitutional Court to annul the results of the first round of the presidential election.
However, while AK may have emerged from the elections in a stronger position, the new government will still face formidable challenges. One could be a new crisis over the rescheduled presidential election. At first glance, cooperation only with the pro-Kurdish independents would be enough to give AK the two-thirds majority needed to elect a president in the first round. However, if the Party again proposes Gul or some other AK member as its candidate, it will be reluctant to base his election on support from a Kurdish party; that would only intensify the opposition of the secularists and hard-line nationalists. Parliament has 30 days in which to choose a new president, and if it ends up in another impasse, there will have to be another round in October. But in October there will also be a referendum on several constitutional reforms, including a proposed change in the system for choosing a president, according to which the president will be elected by popular vote rather than by Parliament. The best way for AK to avoid another crisis on this issue would be to work with the opposition to find a consensus candidate.
On the economic front, the main test for the government will be to preserve the gains of the previous term, including high growth rates, reduction of inflation to single digits, and the lowering of the external debt; these gains helped produce a new Islamic middle class that strongly supported AK. But the government will also have to deal with high unemployment rates and huge gaps between different regions of the country. Finally, it will want to make further progress in negotiations for accession to the European Union, whatever the doubts about the prospects of that ever actually happening.
At the regional level, the greatest challenge for Erdogan will be to decide on policy regarding Iraq. Since 2005, there has been an upsurge in terrorist incidents and casualties from actions attributed to the Kurdish Workers' Party (PKK-Kadek). The Turkish Army claims that several thousand PKK fighters have found refuge in northern Iraq and benefited from the benign indifference of the Americans and the Iraqi Kurds. The Turkish electoral campaign was marked by strong demands for extensive military intervention in northern Iraq and large forces have been concentrated on the Iraqi border. Truly large-scale incursions have thus far not taken place, perhaps because of American warnings, but the government may eventually find it very difficult to resist domestic pressure to act more forcefully, especially if/when American forces begin to withdraw.
To sum up, AK's electoral success and the popularity of its leaders – Erdogan and Gul – may create the conditions for political continuity and stability in Turkey. Nevertheless, the new government will confront some very difficult challenges – primarily the presidential election and the question of intervention in Iraq – and AK's second term of office could be very stormy, indeed. (INSS26.07)
Back to Table of Contents
11.10 TURKEY: Water Deprivation
With its parched soil and dwindling water supplies, Turkey wishes the weather man could have distributed the world's annual rainfall more evenly this year, according to the Oxford Business Group. Such countries as the United Kingdom, China, India, Bangladesh and Nepal have had more than their fair share of late. Residents in Ankara are meanwhile stocking up on emergency water supplies in anticipation of water cuts.
The director general of Turkey's General Directorate of State Hydraulic Works (DSI), Haydar Kocaker, warned this month that Istanbul had sufficient water supplies for the next 4.5 to 5 months, while Ankara has enough for 78 days. Some predict even less, with the Turkish media expecting large water supply cuts in Turkey's capital from August. According to Kocaker, Ankara's dam water levels fell to 5.5% in 2007 from 23% last year. Dam water levels for the whole of Turkey dropped to 46% from 54% in 2006. That for Istanbul declined by as much as 31.8%, according to the Istanbul Water and Sewerage Administration (ISKI)
Many analysts attribute Turkey's water deprivation this year to the unpredictable effects of global warming. A number of journalists have nonetheless accused the government of allowing unhindered water consumption until after the elections, when supplies are to be restricted. Not losing votes over water cuts in the run up to the elections would have been the motivation. In a television statement, Istanbul Greater Municipality Mayor Kadir Topbas made the point that turning off the water flow would ultimately not make a difference to water supplies as people will stockpile. Personal economization is the way forward.
The water shortage has already taken its toll on agriculture across Turkey. Insiders say that fig production has decreased by 40% in 2007 from the previous year - this for a country that is the world's largest fig producer. The Aegean's grape and olive producers have also suffered thanks due to a largely dry year.
Electricity generation is being affected by water shortages. Ugur Cingi, administrative manager of Electricity Production (EUAS) Demirkopru Hydroelectric power plant recently voiced concerns to the press over whether his plant units would be able to operate should water levels fail to increase next year. Already, Bozdogan town's Kemer Dam in Aydin has had to pull down its shutters until water reserves are replenished, with 58m cubic meters of water left - a mere 10 days worth of electricity.
The government is taking measures to mitigate the effects of another drought in the years to come. In July, the DSI pointed to $12bn worth of foreign investment going towards hydropower plants in Turkey. The government will provide electricity purchasing guarantees to foreign firms for a 10-year period. That is if these companies sell electricity at agreed rates. The DSI also pointed out that the construction of 100 hydropower plants was already under way, and that as many as 960 tenders for the construction of plants had been held and completed. In four years' time - when construction is complete - Turkey will have more plugs and water-stops to collect precipitation and transform it into energy.
Meanwhile, an increase in food prices thanks to the drought could challenge the central bank's efforts to reduce inflation. Fears earlier this year about water supplies in Turkey have proven true, with the government having to come up with increasingly innovative ways of addressing unpredictable rainfall. (OBG02.08)
Back to Table of Contents
11.11 TURKEY: Turkey's Cultural & Economic Presence Grows in Kyrgyzstan
The Jamestown Foundation reported that like other Central Asian states, Kyrgyzstan's relations with Turkey have considerably strengthened since the collapse of the Soviet Union. A July 23 conference held in Bishkek, the Kyrgyz capital, on the role of political actors in state-building in Turkic countries in the 20th century showed that the legacy of Turkey's historic leader, Kemal Ataturk, has been widely popularized in Kyrgyzstan and neighboring states. The conference was organized by the Heydar Aliyev Foundation, established in memory of the late Azerbaijani president.
It is possible to divide Turkey's involvement in Kyrgyzstan into three main stages. The first stage, in the early 1990s, was primarily intellectual, with Kyrgyz experts invited to Turkey to exchange ideas on links between the Central Asian and Turkish peoples. The second stage promoted stronger trade ties between Turkey and Kyrgyzstan in the mid- and late-1990s, making both countries economically interconnected. Stage three began in the late 1990s and consisted of intellectual exchanges, economic ties, and Turkey's educational programs in Kyrgyzstan. However, Ankara's policy in Central Asia has been criticized for having weak funding to promote transnational contacts and to popularize Turkish culture.
Today, Turkey's presence in Kyrgyzstan is visible primarily through education programs and imported goods. Most of the early Turkish businesses in the country were opened by ethnic Kurds. For example, Bishkek's largest supermarket, Beta Stores, is owned by Kurdish businessmen from Turkey. Although this fact is not politicized by the local population, it has raised tensions among the Turkish community in Kyrgyzstan. One Kyrgyz expert even alleges that some Kurdish businessmen in Kyrgyzstan might have contacts with the Kurdistan Workers' Party (PKK). Aziz Kurumbayev, an aide to the Kyrgyz minister of foreign affairs, told Jamestown that official Bishkek has an equal, balanced approach to all ethnic groups from Turkey living and working in Kyrgyzstan.
Roughly 30% of imports at Bishkek's Dordoi market are from Turkey. About 400-500 shuttle traders are constantly involved in importing goods from Turkey. Frakhad, a 23-year-old shuttle trader, told Jamestown that he has created his own niche in the market by importing men's shoes. He explained that he does not need to speak even basic Turkish because he is able to move around by knowing Kyrgyz and Uzbek, and most dealers in Istanbul speak some Russian. He also says that unlike specialized trade companies, shuttle traders do not experience any informal pressure from criminals or law-enforcement agencies in Kyrgyzstan.
There are two Turkish universities functioning in Kyrgyzstan: the Kyrgyz-Turkish University of Manas and the International University of Ataturk-Ala-Too. There are also two state colleges – one for men and one for women. More than a dozen Turkish-sponsored “Sebat” colleges function throughout the country. Among the striking differences between Kyrgyz and Turkish schools is the strong emphasis on English and Turkish languages, natural sciences, and student discipline. Manas University also emphasizes its Anglo-Saxon system of administration.
Competition is strong among Kyrgyz and Turkish lecturers for employment at Turkish universities and colleges. According to one graduate from Manas University, faculty members at Turkish schools enjoy higher respect from the student body and considerably higher salaries than at Kyrgyz schools. They are also expected to be fluent in English and pass a language test. With all subjects taught in English and Turkish, the Russian language is not welcomed by university administrations, even outside of classrooms. As one graduate from a Turkish school told Jamestown, one of his exams included a text describing how Turkish became “one of the most fashionable” languages among young people in the former Soviet republics.
Manas University has a large, well-equipped campus in Bishkek's Jal district and other parts of the city. Following the March 2005 Tulip Revolution in Kyrgyzstan, several members of the new regime illegally attempted to seize control over the university's assets, but the dispute was soon settled. In contrast with Manas University, the construction of the Aga Khan's university in Naryn has still not been completed and quarrels between the university and local officials over land ownership continue. The change of regimes from former president Askar Akayev to current President Kurmanbek Bakiyev considerably hindered the process.
In southern Kyrgyzstan, the Kyrgyz-Uzbek University in Osh, supported by the Uzbek government, has an academic program in Turkic studies with 40 students, while the total number of student reaches about 20,000. Osh National University has a special Turkic department as well. Both academic divisions are financed by the Turkish International Cooperation Agency (TIKA).
According to Kurumbayev, Kyrgyzstan will welcome any foreign education programs, and Kyrgyz citizens should have a plurality of choice. Today, he notes, Chinese, Jewish, U.S. and other educational systems function in various parts of Kyrgyzstan. Turkish schools are oriented toward the poorer segments of the population, and therefore have a large, positive impact in the country. Kurumbayev argues that not only are Kyrgyz students becoming closer to the Turkish culture, but hundreds of students from Turkey who are studying in Kyrgyzstan are acquiring many features of the local culture as well. However, he also thinks that the level of education at Turkish colleges is generally lower than at Kyrgyz schools.
Turkey's presence in Kyrgyzstan is growing, but at a slow rate. Representing Kyrgyz National University, Kemelbek Kozhomkulov told conference participants that Ataturk's ideas should “receive prominent continuation” in the Turkic world and that conferences such as this contribute to this goal. However, Ataturk's legacy still faces strong competition from Russian cultural influence and the growing popularity of the Chinese language. (JF26.07)
Back to Table of Contents
11.12 TURKEY: New Gas Pipeline to Link Azerbaijan & Italy Via Turkey
The Jamestown Foundation reported that since the 1991 collapse of the USSR, resource-poor but strategically vital Turkey has sought to position itself as a major transit hub for burgeoning Caspian energy exports. For 15 years Ankara looked on helplessly as Russia, invoking its rights under the 1936 Montreaux Convention, turned the Turkish Straits into a tanker superhighway. Turkey derived no revenue from the transit even as its waters were put under increasing environmental threat.
Chafing under Moscow's penurious transport monopoly, Azerbaijan and other Caspian states gradually warmed to the idea of alternative export routes bypassing Russia. The 1999 Baku-Suspa pipeline did not transit Turkey, but it buoyed Ankara's hopes for larger projects.
In 2006 the thousand-mile-long Baku-Tbilisi-Ceyhan pipeline opened, allowing Ankara to receive transit fees on the one million barrels flowing through the region each day. Turkey hoped the funds would make up for the $40 billion Ankara claimed that it lost from transiting Iraqi crude because of U.N. sanctions. While Turkey's transit revenue from BTC is estimated at $1.5 billion annually, a new natural gas project will finally realize Turkish aspirations for becoming a major energy transit hub.
On July 26 Italian Minister for Economic Development Pier Luigi Bersani, Greek Development Minister Dimitris Sioufas, and Turkey's Minister of Energy and Natural resources Turkish Hilmi Guler signed an intergovernmental agreement to build a $1.36 billion natural gas pipeline that will connect Azerbaijan's Shah Deniz gas field to Italy via Turkey and the Adriatic. The Turkey-Greece-Italy (TGI) pipeline, with a completion date of 2012, has a projected annual capacity of 11.5 billion cubic meters of natural gas. The Turkish-Greek link is expected to begin operations later this month, while construction of the 131-mile-long Greek-Italian undersea portion of the pipeline is to begin next year. Turkey will take 15%, or 1.74 billion cubic meters annually, of the TGI's natural gas.
Bersani said that the TGI pipeline plan "is the first and the most advanced one, in a position to connect the area of the Caspian to European consumers.” Guler commented, "Turkey and Greece will become a bridge for the transmission of gas from Anatolia to the West. My earnest desire is to accomplish the tripartite agreement that includes Turkey, Greece, and Italy and to pull together a new collaboration for the south corridor.”
Washington strongly supports the project. In a written statement, U.S. State Department spokesman Sean McCormack said, "The United States congratulates the prime ministers of Turkey, Greece, and Italy for today's signing in Rome of the inter-state agreement for the construction of the Turkey-Greece-Italy (TGI) pipeline…The agreement constitutes the culmination of the joint efforts of the three countries, with the strong support of the USA and the European Union, to thus contribute so that Europe diversifies the sources of the supply of natural gas from the Caspian Sea, and to promote the economic growth of the region of Caspian."
Washington is certainly not thinking small. On July 9 Deputy Assistant Secretary for the Bureau of European and Eurasian Affairs Matthew J. Bryza told an “on-the-record briefing” at the 10th Annual U.S.-Azerbaijan Security Dialogue in Washington, “Part of what we're talking about here today is trans-Caspian security in a broad sense, and we have a challenge to make sure that market principles decide where the other great quantity of gas around the Caspian, which is in Turkmenistan, where that gas or how that gas makes it to market. There is a large - a huge supply of natural gas in the far western reaches of Turkmenistan, which, if the market decides, will make its way to Europe via Azerbaijan.”
However, Washing is less pleased about other Turkish energy developments. On July 31 Iranian Oil Minister Kazim Veziri Hamane said that, following the recent preliminary agreement between Turkey and Iran, European states had begun negotiations with Turkey to purchase Iranian natural gas. If Ankara's negotiations with Washington are producing unease, there is little indication that Russia will quietly sit by as the West attempts to corral Turkmenistan's natural gas assets, the world's fifth-largest natural gas reserves, which Gazprom has been angling to monopolize as well.
Furthermore, Turkey remains vulnerable to Moscow's pressure, most notably because of the Russian-Turkish Blue Stream natural gas pipeline, which came online in November 2005, with Gazprom last year delivering 8 billion cubic meters of Russian natural gas. Russia already supplies more than 60% of Turkey's natural gas and 20% of its oil, and Gazprom's hardball tactics over natural gas supplies to Belarus, Ukraine, Poland, and Georgia cannot be very far from the minds of policymakers in Ankara.
Further increasing potential Russian political pressure on Ankara was the July 5 auction and sale of a 51% share in Turkey's sole petrochemicals company, Petkim Petrokimya, to the newly chartered Transcentral Asia Petrochem Holding Kazakh-Russian company for $2.05 billion, outbidding the Azerbaijan state oil company SOCAR. The deal is Russia's fourth-largest foreign investment ever and by far the largest Russian investment acquisition in Turkey. Petkim Petrokimya generates annual revenues of $1.6 billion and supplies most of Turkey's domestic market with materials for its plastics, textile, and detergent sectors, with one-quarter of Petkim Petrokimya's products then being sold on export markets.
It is one thing for Moscow to acknowledge that Azerbaijan has effectively slipped from its orbit, quite another to see it used as a transit bridge to tap Turkmen energy. In such an event, Moscow has some significant cards to play that could derail, if not kill, Turkish hopes of being a major east-west energy bridge in the 21st century. (JF03.08)
Back to Table of Contents
- Israeli Shekel conversions done at a rate of NIS 4.30 = $1.00
- Turkish Lira conversions done at a rate of NTL 1.5 = $1.00
- Cypriot Pound conversions done at a rate of C£ 1.00 = $1.60
- Jordanian Dinar conversions done at a rate of JD 1.00 = $1.41
- UAE Dirham conversions done at a rate of Dh 3.70 = $1.00
- Omani Rial conversions done at a rate of OR 0.385 = $1.00
- Pakistani Rupee conversions done at a rate of Rs 60 = $1.00
This fortnightly newsletter is a free service of Atid, EDI. We are a team of economic and trade development consultants, headquartered in Jerusalem, with satellite operations in Istanbul. EDI works with an international clientele interested in identifying and researching business opportunities in the region. We also serve as the regional representative offices for a number of U.S. states and bilateral Chambers of Commerce. EDI's other services include development of feasibility studies and tailored research reports, as well as identification of potential joint ventures for commercial clients. For more information on how we may better assist you, please visit our Web site at: http://www.atid-edi.com.
|
