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TOP STORIES
TABLE OF CONTENTS:
1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS
1.1 Ministry of Finance Wants More Oil & Gas Royalties
1.2 MK Plans 'Popcorn Law' For Movie Goers
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2: ISRAEL MARKET & BUSINESS NEWS
2.1 Tel Aviv Stock Exchange Hits All-Time High
2.2 US Study Finds Huge Gas Potential in Israel
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3: REGIONAL PRIVATE SECTOR NEWS
3.1 Callison Designs Newest Location for Leading Home Retailer in the Middle East
3.2 First Boots Branded Store In Saudi Arabia Opened in Mall of Arabia
3.3 CRA Expands Middle East Presence with the Opening of Saudi Arabia Office
3.4 MEDIC EXPO 2010 Brings Medical Technologies to Greece
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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS
4.1 SRI & HCL CleanTech Develop a New Biofuel Production Process in North Carolina
4.2 Israel Corp. Develops Alternative to Renault for Better Place with Chinese Firm Chery.
4.3 Pegasus To Invest $150 Million in Israeli Cleantech & Security Companies
4.4 Photovoltaic Park In Southern Greece Ready
4.5 ECOTEC to Open in Athens on 22 April
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5: ARAB STATE & PAKISTANI DEVELOPMENTS
5.1 Jordan's Inflation Index Up 4.6% In First Quarter
5.2 Bahrain GDP Rose 50% Between 2004 to 2009
5.3 UAE to Revamp Economic Laws
5.4 Oman Annual Inflation Inches Up To 2% in February
5.5 Saudi Central Bank Governor Named Head of GCC Monetary Council
5.6 Saudi Cabinet Approves 5-Year Plan
5.7 Saudi Population Will Not Exceed 26 Million This Year
5.8 Saudi to See 13 Million Tourist Arrivals This Year
5.9 Egypt's Inflation Slips to 12.2% in March 2010
5.10 Egypt's Suez Canal Revenues Jump In March 2010
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6: TURKISH, CYPRIOT, GREEK & BULGARIAN DEVELOPMENTS
6.1 Turkish Inflation Rate Declines In March From 15-Month High
6.2 Ankara Foresees Higher Growth In Economy Following Latest Data
6.3 Samsun Port On Turkey's Black Sea Is Transferred To Private Hands
6.4 Cyprus GDP Shrank by 0.3% in 2009's Fourth Quarter
6.5 Cyprus Inflation Moderates in March
6.6 Greece Wins $61 Billion Aid Pledge To Restore Confidence
6.7 Bulgaria Gives Up Euro Bid On Hidden Deficit
6.8 Bulgaria Economy Minister Seeks US Help For Belene NPP
6.9 Bulgaria Set To Privatize Tobacco Monopoly & a Major Military Plant
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7: GENERAL NEWS AND INTEREST
*ISRAEL:
7.1 Israel Honors Fallen Soldiers With Jerusalem Service & National Siren
7.2 Israel's Independence Day – 62 Years Since Sovereignty Regained
7.3 Sea of Galilee Rose Six Centimeters Over Passover
*REGIONAL:
7.4 Saudi Women to Get New ID Cards for GCC Travel
7.5 US AG Holder Signs First Criminal Law Enforcement Agreement Between United States & Algeria
7.6 Turkey to Mark National Sovereignty and Children's Day
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8: ISRAEL LIFE SCIENCE NEWS
8.1 Teva Receives Favorable Court Decision Regarding Seasonique
8.2 Can-Fite Steps Forward to Last Stage of Its Phase I/II Liver Cancer Study with the CF102 Drug
8.3 Teva Settles Generic Eloxatin Litigation
8.4 Rosetta Genomics Processing Fine-Needle Aspirate Cell Block Samples for Lung Cancer Subclassification
8.5 Teva's Copaxone Reaches One Million Patient Years of Experience in the Treatment of MS
8.6 PROLOR Awarded Israeli Grant for Human Growth Hormone Program
8.7 Roche Acquires Medingo & Expands in the Growing Insulin Delivery Systems Market
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9: ISRAEL PRODUCT & TECHNOLOGY NEWS
9.1 Optibase Introduces World's First Encoding Platform with up to 104 HD and SD Channels
9.2 ActionBase & ClusterSeven Provide Complete Risk Management for Spreadsheet Processes
9.3 DHS Selects Waterfall Security Solutions' as part of its new National Cyber Security Test-bed at the INL
9.4 TowerJazz Announces VectraWave's First 40G Circuit Designed Using SiGe BiCMOS Process
9.5 PrimeSense Supplies 3D-Sensing Technology to "Project Natal" for Xbox 360
9.6 Doe Run Shortens Downtime With iSolve Virtual Knowledge Manager
9.7 Autodesk Media and Entertainment Selects Mellanox to Accelerate Multimedia
9.8 Mellanox Provides Complete Portfolio of 40Gb/s Cable Interconnect Products
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10: ISRAEL ECONOMIC STATISTICS
10.1 Israel Sees Increase in Working & Poor Families
10.2 Israelis Feel Local Products Are Better
10.3 Tourists Flock To Israel In Record Numbers During March
10.4 Israelis Spent NIS 4.2 Billion on Passover Purchases
10.5 Hebrew University Again Tops Revenue Table
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11: In Depth
11.1 ISRAEL: Israel Aid Pays U.S. Dividends That Exceed Cost
11.2 IRAQ: Coalition-Courting Politics
11.3 KUWAIT: Gassing Up
11.4 UAE: Training for the Future
11.5 EGYPT: Egypt Pharmaceuticals and Healthcare Report Q2 2010
11.6 LIBYA: Political risks to watch in Libya
11.7 MOROCCO: The Decentralization of Morocco's Monarchy
11.8 MOROCCO: Ahead of the Rest
11.9 PAKISTAN: Pharmaceuticals and Healthcare Report Q2 2010
11.10 PAKISTAN: Oil and Gas Report Q2 2010
11.11 TURKEY: OTC Pharmaceutical Sales in Turkey Are Predicted to Increase
11.12 TURKEY: Nabucco Alternative Undercuts Potential Disruptions to EU Energy Supplies
11.13 TURKEY: Power Struggle Escalates In Turkish Coup Plot Case
11.14 GREECE: Fitch Downgrades Greece to 'BBB-'; Outlook Negative Ratings
11.15 BULGARIA: Markets Keeping Capital
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1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS
1.1 Ministry of Finance Wants More Oil & Gas Royalties
On 13 April, Minister of Finance Steinitz announced that he has appointed a committee to review policies on Israel's oil and natural gas resources, which will submit its recommendations in August. The move follows a stormy Knesset discussion in February over government royalties from gas and oil discoveries. The new committee will consider raising the taxes, fees and royalties on gas and oil discoveries in Israel. The government currently receives 12.5% in royalties on gas and oil sales. The Ministry of Finance said, "The large gas discoveries in Israel and the possibility of more large discoveries requires a review of the fiscal system (taxes, royalties, and fees) in order to consider whether this system, set in 1952, is suitable for the 21st century. The new committee will examine all aspects of the fiscal system, compare them with Western countries with similar macroeconomic and democratic characteristics and propose fiscal policies that will apply to future oil and gas discoveries. (Globes 13.04)
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1.2 MK Plans 'Popcorn Law' For Movie Goers
Likud's MK Carmel Shama is hoping to pass a law that would limit outrageous popcorn prices at the movies. He plans to bring the "popcorn law" for a vote now that the Knesset has returned from its Passover break. A large box of popcorn usually sells for about $5 at theater concession stands, more than double what it costs at a supermarket and 10 times more than it would cost to make at home. Shama said he had support from both the government and opposition lawmakers for the move that would put limits on what theatres and other public entertainment venues, like sports stadiums, could charge to captive audiences. However, cinema owners slammed the move, saying it was a populist measure that ignored the free market. (AFP 02.04)
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2: ISRAEL MARKET & BUSINESS NEWS
2.1 Tel Aviv Stock Exchange Hits All-Time High
On 6 April, the Tel Aviv Stock Exchange (TASE) rose to a record level. The Tel Aviv 25 Index rose 0.37% in to an all-time high of 1,238 points, just above the previous record reached in November 2007. The index has climbed 110% from its recent low ebb of 592 points in November 2008. The TASE has easily outperformed others stock markets over the past year. The Dow Jones has risen 67.6% from its low point last year, NASDAQ 91.5%, the FTSE 64.5%, the DAX 70.5%, the Nikkei 59.9%, and the Hang Seng 95.5%. Only Russia's MICEX, which has risen 191.6% from its recent low point in October 2008 and India's SENSEX 30, which has risen 112.3% have outperformed the Israeli market in wake of the global economic crisis. The TASE got a boost from international markets. In the wake of the latest macroeconomic figures in the US, including the strongest job numbers in three years and a rise in the Purchasing Managers Index for March, Wall Street indices rose by up to 0.5% yesterday, to reach an 18-month high. On the domestic front, investors are celebrating the TASE's record and are preparing for the TASE to join the MSCI Developed Markets list on 27 May. Investors anticipate capital inflows from passive investors (those tracking indices) as well as divestment by active capital (such as hedge funds and mutual funds), a trend that has already been felt on the market since the beginning of the year. The Bank of Israel reported earlier that foreign investors sold a net $450 million in TASE-listed shares in February, after buying a net $1.75 billion in 2009.
Israel's economic growth was 0.7% in 2009, compared with a 2.4% contraction in the U.S. On 11 January, the Bank of Israel raised its 2010 growth forecast to 3.5% from 2.5%, citing "positive" information on the global and local economies. On 25 March, Bank Leumi Le-Israel, the country's largest lender, increased its forecast for economic expansion to 3.8% from 3.5%. The unemployment rate fell to 7.4% in the fourth quarter, the lowest level in a year, as growth accelerated. Energy stocks soared after the country's largest discovery of natural gas was reported in January 2009. Delek Drilling LP and Avner Oil & Gas Ltd., partners in the find in the Mediterranean Sea off Israel's coast, are up about five-fold since the announcement. Delek Group, Isaac Tshuva's holding company that controls about 32% of Tamar through Avner and Delek Drilling, has surged more than six-fold. (Various 06.04)
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2.2 US Study Finds Huge Gas Potential in Israel
Globes reported in 11 April that participation units in oil and gas exploration partnerships traded on the Tel Aviv Stock Exchange rose sharply. The reason for the rises, apart from the positive general market trend, apparently lies in a US government report published on 8 April said in a region of which Israel and its economic zone form a considerable proportion, there is potential for finding huge quantities of natural gas, amounting to about seventeen times the reserves discovered in the Tamar field 90 kilometers west of Haifa. In addition, the report finds that in the same region, there is potential for finding some 1.7 billion barrels of oil. However, although the numbers look big, and have the backing of a US body, a look at the sources of the report reveals that the data on which it is based are not new, and were gathered in 2000-2008. Some actually came from Israeli sources, among them the Geophysical Institute of Israel. Although the report is only about potential, and it could be that the exploration partnerships now have more up to date information, investors flocked to their participation units. Ratio, which has been a focus of attention recently, since in the next few weeks it is due to publish the results of the three dimensional seismic survey it carried out at the end of 2009, rose 14.5%. Zerah, which has an exploration permit in an area close to shore, rose 9.7%. Modiin rose 10.7%, while Israel Land Development Company, which only recently bought the Mira and Sara exploration licenses in the Mediterranean, rose 6.9%. (Globes 11.04)
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3: REGIONAL PRIVATE SECTOR NEWS
3.1 Callison Designs Newest Location for Leading Home Retailer in the Middle East
Seattle, Washington's Callison, an international architecture and design firm, announced the opening of the newest Landmark Home Centre in Dubai. The store evolves the brand and infuses a sense of warmth and comfort while creating clear merchandise zones. The zones – inspire, create, live, play and retreat – reflect the many facets of our home lives. The journey through the store is punctuated by inspiring visual merchandise displays. Dramatic lighting, display fixtures and creative merchandise groupings all reinforce Landmark Home Centre as a style authority as well as a destination for great value. The color palette exudes a sense of warmth and comfort and serves to highlight the merchandise while the lighting has been softened and focused to bring your eye to the merchandise. Callison recently designed the first international Bloomingdale's and Cole Haan locations, also in Dubai. (Callison 08.04)
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3.2 First Boots Branded Store In Saudi Arabia Opened in Mall of Arabia
The UK's Boots International opened its first branded store in Saudi Arabia at Mall of Arabia, Jeddah. The new store marks an important milestone in the development of the Boots retail brand in the Middle East and will be the 43rd Boots branded outlet in the region. The Mall of Arabia Jeddah store offers customers a wide selection of internationally trusted healthcare, skincare products and toiletries all under one roof. Shoppers can choose from over 6,000 health and beauty products, including 3,000 own brand products ranging from cosmetics and skincare to toiletries. With a focus on affordability and accessibility, Boots own brand value for money product ranges start from as little as ten riyals. The store also features areas dedicated to healthy living, with pharmacists offering expert advice on all healthcare-related topics, and a private consultation room for patients. The Mall of Arabia outlet boasts a special beauty counter for personalized cosmetic and skincare advice from dedicated beauty consultants. The first Boots branded stores in the Middle East opened in May 2006 in partnership with regional franchiser M. H. Alshaya Co., and outlets are now operating in Bahrain, Kuwait, Qatar and the UAE. The award-winning range of health and beauty brands available in the new store include No7, the UK's leading cosmetics and skincare brand; Soltan, one of the UK's biggest-selling suncare ranges; and Botanics, a holistic range of skin, hair, bath and body products that brings together plant extracts with scientifically proven formulations, created in conjunction with the Royal Botanic Gardens in London. (Boots 31.03)
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3.3 CRA Expands Middle East Presence with the Opening of Saudi Arabia Office
Boston's CRA International, a worldwide leader in providing management, litigation, regulatory and financial consulting services, has expanded its presence in the Middle East with the opening of an office in Riyadh, Saudi Arabia. The new Riyadh office will complement CRA's existing office in Bahrain, which opened in 2005 as a base from which to serve clients in the region. Clients have engaged CRA for a broad range of projects throughout the region, including in Jordan, Bahrain, Qatar, the United Arab Emirates, Oman, Saudi Arabia and Kuwait. CRA's management team in the region is comprised of consultants from the Global Industrial Consulting (GIC) and Energy & Environment Practices. (CRA 06.04)
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3.4 MEDIC EXPO 2010 Brings Medical Technologies to Greece
From 23 – 25 April, Athens will play host to MEDIC EXPO 2010. The event will focus on the medical equipment sector. Exhibitors will include manufacturers of technical and diagnostic equipment, technical therapeutic ICU equipment, laboratory and technical equipment, laboratory products, First Aid equipment and products, transport machinery, medical consumption, hospital products and equipment, Ultrasound and X-Ray equipment, anatomical and orthopedic products. There will also be ophthalmologic machinery, dental equipment and machinery, medical O2, respiratory machinery, medical hospital tools, additional hospital equipment, interior building services, healthcare consultancy, technical support, clinical diet, furnishing, medical costumes and hospital vehicles. Attending the event will be the Associate Director of the Pennsylvania's Eastern Mediterranean Regional Office. This office is operated by the Jerusalem, Israel consulting firm Atid, EDI (http://www.atid-edi.com).
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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS
4.1 SRI & HCL CleanTech Develop a New Biofuel Production Process in North Carolina
HCL CleanTech, a US-Israeli biofuels technology development company, has selected Southern Research Institute in North Carolina as the hosting site and operator of its first pilot plant to produce low cost fermentable sugars, high-quality lignin and tall oils from North Carolina pine trees. The pilot plant is now under construction at Southern Research and will begin operations this summer. Southern Research's advanced energy research facility, located in Durham, helps develop and prepare new clean energy technologies for commercialization. Researchers there are currently developing four different technologies that convert America's diverse carbon resources into high-value products such as clean diesel fuel, jet fuel, ethanol, fermentable sugars, electric power and bioproducts. Southern Research works with commercial, government, and research institutions that seek to develop and commercialize advanced energy technologies by designing, building and testing pilot-scale prototypes of these technologies. Once HCL CleanTech's pilot-scale facility is built and commissioned, Southern Research engineers, scientists and technicians will begin operating the unit this summer. Some goals of that effort are to determine optimal operating conditions, define operating characteristics and seek technology optimization paths HCL CleanTech can integrate into its first generation commercial plants. Sugars, lignins and tall oils produced at the facility will be distributed for testing of integration to more than 40 companies across the U.S. and internationally who have the technologies to convert the sugars to biofuels and bioproducts and have requested to try the sugars, the lignin and the tall oils from the pilot plant.
HCL CleanTech has developed a proprietary technology to make an old, industrially proven German process converting lignocellulosic biomass to fermentable sugars for fuel production economically attractive. These fermentable sugars are considered a gateway to advanced biofuels (biobutanols, biodiesel, jet fuel, etc.) and biochemicals (bioplastics, etc.). Modern chemical technology makes the implementation straightforward and immediate. HCL CleanTech's use of concentrated hydrochloric acid (HCl) efficiently hydrolyzes cellulosic materials and allows a large variety of feedstocks to be used with minimal configuration. HCL CleanTech has developed other proprietary technologies to de-acidify lignin and separate tall oils - both high quality byproducts to the sugars.
Incorporated in December 2007, Herzliya's HCL CleanTech (http://www.hclcleantech.com) is a technology development company co-founded by two prominent Israeli Industrial Chemical Research scientists. Since May 2009, HCL CleanTech Ltd is fully owned by HCL CleanTech Inc whose offices are at the Biofuels Center of North Carolina in Oxford. (SRI 01.04)
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4.2 Israel Corp. Develops Alternative to Renault for Better Place with Chinese Firm Chery.
On 6 April, Globes reported that the Israel Corporation is working on the development and manufacture of a line of electric cars, which will serve Better Place LLC, led by Shai Agassi, and other ventures within 3-4 years. The cars will also have a gasoline engine model based on the engine of the platform which will made by Chery-Quantum LLC, a joint venture between Israel Corp. and Chery Automobile Company Co. Development and design of the cars is being carried out by international car engineering and design subcontractors, including Austria's Magna Steyr Fahrzeugtechnik and Italy's Italdesign - Giugiaro. In the first stage, which is scheduled to be completed by October 2010, they will develop the technical and engineering concept for four models, which will have the rear-wheel drive and options for electric propulsion that will apparently support Better Place's rapid battery replacement system. In the first stage, €37.2 million in being invested. In the second stage, which is due to be completed between September 2012 and the second quarter of 2013, Magna Steyr and Italdesign - Giugiaro will develop all the technical and performance specifications for mass production of cars at the Chery-Quantum plant, which will be built in China at an investment of €120 million. The estimated development cost of the second stage is €170 million. Israel Corp. estimates that in order to begin mass production of the electric cars, it will require an additional €400 million in outside financing, which it will obtain from banks and government grants. Better Place's only current electric car is the Renault Fluence. Industry sources believe that Renault has imposed numerous restrictions on the global marketing of the car, which is why a source of cars from Israel Corp., which currently owns 40% of Better Place, is a critical factor for the venture's business development. (Globes 06.04)
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4.3 Pegasus To Invest $150 Million in Israeli Cleantech & Security Companies
Globes reported that US private equity fund Pegasus Capital Advisors will invest an additional $150 million in Israeli companies with an emphasis on technological capabilities. Pegasus said that in 2010, they will mostly invest in Israeli water, renewable energy and homeland security technology companies. Pegasus is not a large private equity fund, in US terms. Founded in 1995, it manages $1.8 billion, and focuses on mid-sized companies, by providing financial support, and sometimes strategic advice with a focus on penetrating the US market. This is not the first time that Pegasus has invested in Israeli companies; it invested about $100 million in Israeli companies in 2005-08. Pegasus was also mentioned in connection with the acquisitions of Bezeq The Israeli Telecommunication Co. and Granite Hacarmel Investments. (Globes 08.04)
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4.4 Photovoltaic Park In Southern Greece Ready
On 7 April Positive Energy, a Greek contractor that specializes in using renewable energy technologies, has completed the construction of a 100-kilowatt-peak (kWp) photovoltaic park in the southern Peloponnese. The construction of the project, located in the area of Diavolitsi, north of Kalamata, was completed with Ergopack SA, and it has been connected to the national power grid, Positive Energy said in a statement. On an annual basis, the photovoltaic park – which converts solar radiation into power – is expected to produce at least 175,000 kilowatt-hours of electrical energy, reducing carbon dioxide emissions by 175 tons, the company added. (Various 08.04)
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4.5 ECOTEC to Open in Athens on 22 April
Bigger in size and with more participations than all previous editions, the 3rd international exhibition ECOTEC – Environmental Technologies & Photovoltaic Systems will open on 22 April in the Expo Athens exhibition centre in Anthoussa Attica. This is considered to be the biggest exhibition for environmental technologies in the Balkans region, with more than 200 exhibitors from 15 countries (Germany, France, UK, Italy, Denmark, Spain, Czech Republic, USA, China, Israel, Korea and others) and specializes in the sectors of renewable energy sources, recycling, urban and industrial waste management, energy saving, eco building, alternative fuel, environmental restoration. The exhibition will last till Sunday, 25 April. Attending the event will be the Associate Director of the Pennsylvania's Eastern Mediterranean Regional Office. This office is operated by the Jerusalem, Israel consulting firm Atid, EDI (http://www.atid-edi.com).
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5: ARAB STATE & PAKISTANI DEVELOPMENTS
5.1 Jordan's Inflation Index Up 4.6% In First Quarter
Jordan's Department of Statistics announced that the consumer price index (CPI) increased by 4.6% during Q1/10, compared to the same period of 2009. The announcement said that the increase was driven by a rise in the prices of several commodities and services, such as transportation services, which went up by 14.8%, fuel by 8.4%, education services by 6.5%, meat and poultry by 7.1% and sugar by 20.6%. The figures showed that the prices of dairy products and eggs dropped by 2.4% during the first three months of 2010 compared to the same period last year, indicating that cooking oil prices also decreased by 4.6%, and fruits and vegetables by 5.7% and 2% respectively. During March 2010, the CPI went down slightly by 0.04% compared to the previous month of February as the prices of clothes decreased by 2%, vegetables by 2%, meat and poultry by 0.8%, dairy products and eggs by 1.1% and sugar by 0.3%. The report also highlighted that the prices of certain commodities and services rose during March over the previous month, including transportation services, which increased by 0.8%, fruits by 2.8%, cooking oil by 1.7% and tea and coffee by 1.8%. (JT 11.04)
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5.2 Bahrain GDP Rose 50% Between 2004 to 2009
Bahrain's gross domestic product (GDP) increased by nearly 50% between 2004 to the end of last year, the country's Economic Development Board announced. The oil and gas, aluminum and financial sectors account for nearly half of the GDP. The finance sector alone accounted for more than a quarter of GDP. Bahrain's average rate of output growth for most of the last decade was well over 6%, with output increasing by 3% last year despite the global downturn. Over the six years, average wages for Bahrainis increased by a little over 25%, while the number of Bahrainis in employment also increased by a quarter. (TradeArabia 08.04)
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5.3 UAE to Revamp Economic Laws
The UAE plans to modernize its company, foreign investment and industrial laws to boost transparency and investor confidence, according to the Ministry of Economy. The UAE is revamping its legal system to reflect the changes in the global economic landscape and maintain its competitive edge as a centre of business, according to an announcement by Economy Minister Sultan bin Saeed Al Mansouri. The new laws will cover Foreign Investment, Competition, Certificate of Origin, Arbitration, Industry Affairs Regulation, Amendment of Industrial Ownership, Anti Commercial Fraud, Auditors Profession Regulation and Companies' Law. No date was given for when the new regulations would take effect. The new companies law being discussed will make it mandatory for companies in the UAE to put a general corporate governance framework to ensure protecting shareholders rights and achieve transparency and disclosure of financial results. The proposed foreign investment law is to unify existing regulations and include guarantees for investment projects, allow investors to manage their projects and facilitate licensing and capital transfers and offer effective mechanisms for resolving disputes. (GN 06.04)
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5.4 Oman Annual Inflation Inches Up To 2% in February
Oman's annual inflation maintained a modest upward trajectory to reach 2% in February, well down from last year as monthly prices for food, rent and transport stayed unchanged. The global downturn slashed price growth across the world's largest oil exporting region last year from record double-digit peaks in 2008, with the UAE and Qatar experiencing deflation. Consumer price inflation in non-OPEC member Oman started picking up again in December, when it rebounded to 0.9% from a low of 0.8% the previous month. It reached 1.7% in January but has remained well below the June 2008 high of 13.7%. The National Economy Ministry said monthly prices were stable in three main categories that comprise 74% of the consumer index - food, beverages and tobacco; transport and communications services; and rents, electricity water and fuel. Prices rose slightly for furniture, home appliances, education, personal commodities and other services. Oman's consumer prices soared in 2008 on imported inflation as a result of the weak U.S. dollar, which the rial currency is pegged to. Analysts have forecast inflation at 4.0% this year after 3.4% in 2009. (NEM 05.04)
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5.5 Saudi Central Bank Governor Named Head of GCC Monetary Council
On 30 March, Muhammad Al Jasser, head of the Saudi Arabian Monetary Agency (SAMA), was named the first chairman of the Gulf Cooperation Council joint monetary council, a forerunner for a regional central bank. Rasheed Al Maraj, the governor of Bahrain's central bank, will be his deputy. The move both underlined Saudi Arabia's dominance in the single currency project and reducing prospects for the UAE and Oman to return. In December 2009, rulers of the Gulf Cooperation Council (GCC) endorsed a plan for a currency union despite the absence of the UAE, the GCC's second-biggest economy after Saudi Arabia, and Oman. Last year, the GCC abandoned an initial 2010 deadline for issuing common notes and coins, saying the joint monetary council would draw a new timeline for the project. The four countries, which also include Kuwait and Qatar, did not say how they plan to choose the next head of the council nor did they fixed a date for the launch of the single currency for the Gulf central bank. The GCC council will mainly work on the regulatory framework of the Gulf central bank and push for greater coordination of monetary and foreign exchange policies to pave the way for the launch of a single currency. While Saudi Arabia is hoping the UAE would reconsider its position and rejoin the union, it is not prepared to take second place in the formation of the union and its decision-making process. The formation of the regional central bank and single currency to take some time, pending the alignment of the four GCC countries' economic policies. (Beltone31.03)
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5.6 Saudi Cabinet Approves 5-Year Plan
Saudi Arabia's Council of Ministers has approved the goals of the ninth five-year development plan (2010-1015) that highlights human rights, education and national security among other areas. The Cabinet also resolved to expand specialized medical services and set off the National Committee for Construction Code. The government will improve backing for NGOs as well as SMEs (small and medium enterprises), while economic unity with other GCC states will be strengthened during the five-year plan. The Cabinet also embraced steps towards medical treatment in foreign countries as well as making special medical services available at government hospitals throughout Saudi Arabia. (AN 06.04)
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5.7 Saudi Population Will Not Exceed 26 Million This Year
The population of Saudi Arabia will not exceed 26 million this year. Population growth is one of the biggest challenges for the Gulf Arab state which needs to create tens of thousands jobs and housing for its mostly young natives. To determine exact population figures, Saudi is holding a rare census from April, the first one since 2004. The total population, including expatriates, hit 25 million last year and with an assumed growth of 500,000 is not expected to exceed 26 million this year. The Central Department of Statistics and Information put the number of Saudis of the total population of 25.37 million at 18 million. Saudi Arabia has pledged investments worth $400 billion to diversify its economy and create new jobs outside the oil industry. It plans a mortgage law to boost home ownership. (Reuters 04.04)
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5.8 Saudi to See 13 Million Tourist Arrivals This Year
Business intelligence firm Business Monitor International (BMI) has forecasted that tourist arrivals in Saudi Arabia will grow 5% year-on-year to 12.91 million in 2010. Influx is expected to grow further by an average of 6.5% year-on-year through 2014, driven by Saudi Arabia's growing popularity among religious and business travelers, it said. Saudi Arabia is home to Islam's holiest cities and several historic sites and is also either a base or a stopover for numerous multinational corporations. These have combined to turn Saudi Arabia into a major tourism hub. Cristal Hotels, a fast growing hotel chain in Abu Dhabi, has confirmed plans to expand in Saudi Arabia. The expansion plans in Saudi Arabia will encompass Riyadh, Jeddah, Khobar and Makkah. Cristal said that it is being encouraged to enhance its Saudi presence due to the government's focus on tourism as part of its comprehensive diversification agenda. The Saudi government is keen on developing its domestic tourism market, given that citizens spend millions on their annual travels abroad, said a statement. The number of Saudi nationals travelling abroad is expected to rise from around 8.07 million in 2009 to almost 11 million by 2014, the statement added. (TradeArabia 06.04)
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5.9 Egypt's Inflation Slips to 12.2% in March 2010
Egypt's annual urban headline inflation slipped to 12.2% in March 2010, from 12.8% in February 2010, as the annual change in food prices dropped to 21.3%, from 22.7%, over the same period, the government statistics agency CAPMAS announced on 10 April. The annual change in housing and utilities costs declined to 1.2% in March, from 1.5% in February 2010, while the change in furniture and maintenance costs rose from 3.2% to 3.9%. On a monthly basis, inflation increased by 0.8%, up from 0.3% registered in February 2010, as food and furniture prices rose by 1.4% and 0.5%, respectively, from 1.1% and 0% in February 2010. While pundits expected higher monthly inflation, the magnitude of the monthly change is lower than they had forecast. The higher increase in the monthly change in food prices did lead to a higher level of inflation in March, resulting in an expectation that headline inflation would average 12% in 2010, compared to the initially expected 11%. Given the decline in annual headline inflation, the Central Bank of Egypt (CBE) may be inclined to leave its interest rates unchanged at its upcoming meeting on 6 May. (Beltone 11.04)
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5.10 Egypt's Suez Canal Revenues Jump In March 2010
Suez Canal revenues jumped to $379.4 million in March 2010, up from $334.1 million in February 2010, and from $327.9 million in March 2009, showed data released by the Cabinet. Revenues registered an annual increase of 15.7%, up from 10.7% in February 2010. The number of ships passing through the Canal rose to 1467 vessels in March, up from 1256 in February 2010, rising by 2% annually. Non-oil vessels increased to 1158 ships in March, from 999 vessels in February 2010, while oil tankers rose to 309 in March from 257 in February 2010. Total tonnage reached 68 million tonnes in March, up from 59 million tonnes in February 2010, with non-oil vessels tonnage rising 18.4% annually to 57 million tonnes. The figures are mostly in line with expectations of $385 million in March and total tonnage of 65 million tonnes. Pundits continue to expect better performance in terms of traffic, especially with the rise in oil prices rendering alternative routes more expensive, and especially for non-oil traffic and tonnage as global growth picks up. (Beltone 06.04)
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6: TURKISH, CYPRIOT, GREEK & BULGARIAN DEVELOPMENTS
6.1 Turkish Inflation Rate Declines In March From 15-Month High
Turkish inflation slowed in March for the first month in five, strengthening the central bank's case for keeping interest rates at a historic low even as growth accelerates. The annual inflation rate fell to 9.6% from 10.1% the previous month, the Turkish Statistical Institute (TurkStat) announced in 5 April. It was forecast at 9.6%, according to the median estimate of 13 economists surveyed by Bloomberg. In the month, prices rose 0.6%. Gov. Yilmaz on 30 March reiterated his goal of keeping interest rates at "low levels for a long time." The bank has maintained that commitment even as gross domestic product expanded an annual 6% in Q4/09 and inflation hit a 15-month high in February. Growth may accelerate to more than 10% in the first quarter, Deputy Prime Minister Babacan said 2 April. The cost of goods leaving Turkish factories and mines rose an annual 8.6% in March, compared with a rise of 6.8% the previous month. Producer prices rose 1.9% in the month. (TurkStat 05.04)
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6.2 Ankara Foresees Higher Growth In Economy Following Latest Data
Following the latest indices which heralded a strong recovery in the economy after the global financial crisis of 2009, the government plans to revise its 3.5% economic growth estimate, as foreseen in the mid-term economic program for 2010, to a higher level by the end of the first half. The latest data have revealed that the Turkish economy saw 6% growth in Q4/09 over the same months of 2008, well above expectations. The economy only contracted by 4.7% in 2009 over 2008, a figure many believed would be far worse. (ZAMAN 08.04)
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6.3 Samsun Port On Turkey's Black Sea Is Transferred To Private Hands
The operating rights to the Samsun Port in Turkey's Black Sea region are transferred to the Cey Group for $125.2 million, which the company paid in cash. The Turkish government sold the rights to operate the Samsun Port in the Black Sea region for 36 years, marking another step in its ambitious privatization program. Top government officials who spoke at the ceremony criticized the legal hurdles that they say are preventing them from selling off state assets more quickly. The State Council has a mandatory 60-day period in which to convey its opinion on the privatization of privileged assets on a case-by-case basis. Turkey has 174 ports and docks, 25 of which are public, 27 municipality-owned and 122 operated by private companies. Nearly 85% of Turkey's foreign trade is conducted through ports. A similar sale of operating rights was previously conducted at the Mersin Port, on the Mediterranean. The operating rights of the Mersin Port were sold for $750 million. (Hurriyet 06.04)
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6.4 Cyprus GDP Shrank by 0.3% in 2009's Fourth Quarter
Cyprus' GDP in Q4/09 shrank by 0.3%, compared to the previous quarter, according to the second estimates released by Eurostat. On a yearly basis, Cyprus' GDP in Q4/09 shrank by 2.8% compared to the same period of 2008, whereas the first estimate showed a decline of 2.7%. Meanwhile, the recovery in the Eurozone seems extremely slow as in the fourth quarter of 2009 it showed zero growth, whereas the EU27 showed a 0.1% GDP growth. On a yearly basis, Eurozone's GDP shrank by 2.2% (initial estimates stood at 2.1%), while the EU27 GDP declined by 2.3% equaling the initial forecasts. According to Eurostat, in Q4/09 Ireland showed the biggest GDP decline with 2.3%, with Greece following with 0.8%. On a yearly basis, Latvia showed the biggest GDP decline with 17.1% and Estonia with 9.5%. (FM 09.04)
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6.5 Cyprus Inflation Moderates in March
Inflation in Cyprus moderated in March, after a rapid build-up in the preceding months, according to the latest data from the Statistical Service. The consumer price index in March 2010, increased by 2.4% compared with March 2009, having risen by 2.9% in February 2010. However, this rate of inflation remains significantly higher than the 1.1% recorded in March 2009. Compared with the previous month, the index rose by 0.96% to 111.98. The Statistical Service reported that this was mainly due to increases in the prices of certain clothing and footwear items after the end of the winter sales, as well as to increases in the prices of petroleum products. Decreases were recorded in the prices of certain fresh vegetables and soft drinks. For the period January-March 2010, the CPI recorded an increase of 2.6% compared to the corresponding period of 2009. (FM07.040)
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6.6 Greece Wins $61 Billion Aid Pledge To Restore Confidence
European governments offered debt-plagued Greece a rescue package worth as much as €45 billion ($61 billion) at below-market interest rates in a bid to stem its fiscal crisis and restore confidence in the euro. Greek bonds and stocks rallied and the euro gained. Forced into action by a surge in Greek borrowing costs to an 11-year high, euro-region finance ministers said on 11 April that they would offer as much as €30 billion in three-year loans this year at around 5%. Greek three-year bond yields plunged 80 basis points to 6.18%. Another €15 billion would come from the IMF.
With the euro facing the stiffest test since its debut in 1999, the 16-nation bloc maneuvered around rules barring the bailout of debt-stricken countries, aiming to prevent Greece's financial plight from spreading and to mute concerns about the currency's viability. Germany also abandoned an earlier demand that Greece pay market rates. The yield premium investors demand to hold Greek 10-year debt instead of benchmark German bunds dropped 48 basis points to 350 basis points Monday morning in London. Greece's benchmark ASE Index climbed 4.7% at the start of trade.
The euro rose as much as 1.4% to $1.3629. The single currency has dropped 4.9% against the dollar this year as the discord within Europe over the response to the Greek crisis sapped faith in Europe's economic management. Bond investors' response will determine whether Greece needs to tap the aid, a Greek Finance Ministry official said in Athens. Greek Finance Minister Papaconstantinou said the government plans to go ahead with debt sales, including a dollar-denominated bond, without taking up the offer for aid.
In the compromise hammered out on 11 April, the European loans would be tied to Euribor and priced above rates charged by the IMF, a nod to German opposition to subsidizing a country that lived beyond its means. The EU will offer a mix of fixed-rate and floating rate loans. The IMF would charge less than the EU. Both types of funding would be offered at the same time. Transfers to Greece would be made by the European Central Bank. Greece raised its estimate of the 2009 deficit from 12.7% of GDP to 12.9%, the highest in the euro's history and more than four times the EU's 3% limit. The Greek government has yet to request a European lifeline, confident that this year's planned budget cut of 4% will stem speculation that it is heading for the euro region's first-ever default. Fitch Ratings highlighted that risk by shaving Greece's debt rating to BBB-, one level above junk, on April 9.
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6.7 Bulgaria Gives Up Euro Bid On Hidden Deficit
On 9 April, Bulgaria's center-right government abandoned plans to apply to join the bloc's exchange-rate mechanism, the so-called Eurozone waiting room, over a larger than expected 2009 deficit caused by unaccounted procurement deals, signed by the previous Socialist-led cabinet. Prime Minister Borisov said it would be insolent to apply for ERM II and the eurozone given the high levels of the deficit. Bulgaria's Finance Minister Djankov told the same press conference that the country's aspirations to join ERM II will not be rewarded this year. He announced that the budgets for 2008 and 2009 will be revised after annexes to a total of 150 contracts incurred losses to the budget worth BGN 2,15 M. The finance minister stressed that the revision of the budgets from the last two years will not reflect on the budget for 2010 and the government will do its best to keep the deficit under 3% in line with the Maastricht criteria. Joining the exchange-rate mechanism was assigned top priority for this year by the new Bulgarian government, which was the reason why it stuck to tight financial policy at the end of 2009 and delayed payments to businesses in a bid to keep low the budget deficit. Minister Djankov, a World Bank economist, hoped to offset a possible reluctance to admit Bulgaria into the ERM, stemming from the global crisis, by garnishing the application with a targeted balanced 2010 budget, small 2009 deficit and laws overhauling the inefficient health-care and social-security systems. Entry into the so-called Eurozone waiting room would have brought Bulgaria closer to the umbrella of the euro region and the protection of the European Central Bank and was conditional on whether the new government would succeed to restore Brussels trust and the budget deficit that the country has posted. Countries must be members of ERM II for two years before they can formally join the eurozone. Bulgaria so far believed that it could be ready for euro entry by 2013. (TSW 10.04)
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6.8 Bulgaria Economy Minister Seeks US Help For Belene NPP
Bulgarian Economy Minister Traikov has asked the US for assistance in finding a strategic investor for the construction of the Belene Nuclear Power Plant. Traikov has discussed this issue with the US Deputy Energy Secretary Daniel Poneman during their meeting on 6 April. Poneman has expressed his support for the efforts of the Bulgarian government to diversify its energy resources by securing liquefied and compressed natural gas from various source countries. The two officials have also discussed the possibilities for Bulgaria to be invited to the next summit of the Global Nuclear Energy Partnership, an organization that aims to develop nuclear power around the world while improving the use of resources and providing greater disincentives to the proliferation of nuclear weapons. Bulgaria's planned second nuclear power plant Belene was started more than 20 years ago but was frozen in the early 1990s after protests by environmentalists. It was re-launched in 2004 under then Prime Minister Saxe-Coburg and construction work began under Borisov's predecessor, Stanishev. More than €1b has been spent just to build the foundations. The construction of the Belene NPP was expected to cost €4b before the global economic crisis kicked in but the Borisov government, which took office in the summer of 2009, estimated it at about €10b. In the fall of 2009, German energy company RWE, which was previously selected as a strategic foreign investor for the Belene NPP and agreed to provide €2b in exchange for a 49% stake, withdrew from the project, thus forcing the Bulgarian government to explore other options. (SMN 08.04)
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6.9 Bulgaria Set To Privatize Tobacco Monopoly & a Major Military Plant
Bulgaria's Privatization Agency hopes to complete the sale of state-owned cigarette monopoly Bulgartabac in 2010, according to Privatization Agency head Nikolov, who explained that the privatization procedure for Bulgartabac had reached a phase in which the state is preparing its sale together with the consultant it picked in February, Citygroup Global Markets Ltd. Two of the less profitable plants of Bulgartabac holding – in the cities of Plovdiv and Stara Zagora – were sold in 2009 through the Sofia Stock Exchange; the holding still owns the two larger and more consolidated factories in Sofia and Blagoevgrad as well as a number of commercial brands. Nikolov also announced that in 2010 the Bulgarian state planned to initiate the privatization of the sizable but troubled military producer VMZ Sopot. In his words, the struggling arms giant will take a while to be privatized because the respective strategy for the it had to be approved by the Parliament first. The head of the Privatization Agency has pointed out that the plans of the Borisov government to privatize state-owned minority shares in some 55 companies are very important because these deals could bring a lot of revenue to the depleted state budget. The sale of state-owned minority shares is one of the major anti-crisis measures adopted by the Borisov cabinet recently in an attempt to raise more state revenue. (SMN06..04)
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7: GENERAL NEWS AND INTEREST
*ISRAEL:
7.1 Israel Honors Fallen Soldiers With Jerusalem Service & National Siren
On Sunday night, 18 April and Monday, 19 April, Israel will observe Memorial Day. Events to mark Memorial Day for Israel's fallen soldiers will begin at 7:30 P.M. with a ceremony at the Western Wall in Jerusalem, attended by the Prime Minister, other dignitaries and bereaved families. At 8 P.M., a one-minute siren was heard across the country. The siren sounded again, for two minutes, at 11 A.M. Monday, marking the beginning of memorial services at each of Israel's 43 military cemeteries. Though a regular work day, activity is usually curtailed and many leave their offices early pending the Independence Day celebrations that follow.
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7.2 Israel's Independence Day – 62 Years Since Sovereignty Regained
Celebrations for the 62nd anniversary of Israel's regaining its independence will begin on Monday evening, 19 April throughout the country, continuing throughout Tuesday, 20 April. The official observance starts when the state flag is raised to full mast at a national ceremony on Mount Herzl in Jerusalem. Israel Independence Day is celebrated annually on 5 Iyar, which corresponded to 14 May 1948, the date the British mandate ended over the Land of Israel. A religious and national holiday, Yom Atzmaut - Independence Day is a celebration of the renewal of the Jewish state in the Land of Israel, the birthplace of the Jewish people. In this land, the Jewish people began to develop its distinctive religion and culture some. Here the Jews preserved an unbroken physical presence, for centuries as a sovereign state, at other times under foreign domination. Throughout their long history, the yearning to return to the Land has been the focus of Jewish life. With the rebirth of the State of Israel, in 1948, Jewish independence, lost 1,878 years earlier, was restored.
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7.3 Sea of Galilee Rose Six Centimeters Over Passover
The Israel Water Authority announced that the water level in the Sea of Galilee rose by six cm (about 2.5 inches) over the Passover holiday. The reasons for this were that water flowed in from the Jordan River and pumping from the lake was stopped during the holiday. The average flow rate in the Jordan River is currently at about 17 cubic meters per second, so the Sea of Galilee is expected to rise further over the coming days, at about 0.5 cm per day. However, the sea – known in Hebrew as the Kinneret – is still 3.87 meters below its full level. March was a drier-than-average month in all of Israel's water basins, especially the northern ones that saw almost no rain. Waters levels in Israel's rivers were low, but there was a surge in the water levels in the rivers of southern Israel at the end of the month. The flow of water into the Sea of Galilee was lower than average for this time of year because of the lack of rains. The water level in the springs that feed the Jordan River – the Dan and Banias – also began to descend. The Dead Sea rose by one centimeter this month after an 8 cm rise the previous month. (IsraelNN 06.04)
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*REGIONAL:
7.4 Saudi Women to Get New ID Cards for GCC Travel
Starting on 10 April, Saudi women will be able to receive a national ID card that can be used to travel to countries of the Gulf Corporation Council (GCC). In addition, Saudi women don't need a male guardian to apply. However, despite the new offer from the Kingdom's Department of Civil Affairs, women will still require permission from their male guardians to travel abroad. The new high-tech cards will include GPS tracking, fingerprints and features that will make them difficult to forge. The ID card, which is optional, has been seen as another step toward women's empowerment in the Saudi Kingdom. (AB 03.04)
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7.5 US AG Holder Signs First Criminal Law Enforcement Agreement Between United States & Algeria
On 7 April, US Attorney General Eric Holder and Algerian Minister of Justice Tayeb Belaiz signed a treaty between the United States and Algeria on mutual legal assistance in criminal matters, the first ever criminal law enforcement agreement between the two countries. The treaty strengthens the two countries' common efforts in the fight against terrorism and transnational crime by enabling the most modern procedures for law enforcement cooperation. The mutual legal assistance treaty, or MLAT, will be an effective tool in the investigation and prosecution of terrorism, cybercrime, white collar offenses and other crimes. Among other tools, the treaty will help law enforcement officials from the two countries obtain testimonies and statements; retrieve evidence, including bank and business records; provide information and records from governmental departments or agencies; and provide a means of inviting individuals to testify in a requesting country. The formal treaty signing took place at the Ministry of Justice in Algiers, Algeria. To date, the United States has negotiated and signed more than 50 bilateral MLATs with law enforcement partners around the world. (U.S. Department of Justice 07.04)
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7.6 Turkey to Mark National Sovereignty and Children's Day
On 23 April, Turkey will celebrate National Sovereignty and Children's Day. The founder of the Turkish Republic, Mustafa Kemal Ataturk, dedicated 23 April 23 to the children of the country to emphasize that they are the future of the new nation. It was on 23 April 1920, during the War of Independence, that the Grand National Assembly met in Ankara and laid down the foundations of a new, independent, secular and modern republic from the ashes of the Ottoman Empire.
Every year, the children in Turkey celebrate this "Sovereignty and Children's Day" as a national holiday. Schools participate in week-long ceremonies marked by performances in all fields in large stadiums watched by the entire nation. Among the activities on this day, the children send their representatives to replace state officials and high ranking bureaucrats in their offices. The President, the Prime Minister, the Cabinet Ministers and provincial governors all turn over their positions to children's representatives. These children, in turn, sign executive orders relating to educational and environmental policies. On this day, the children also replace the parliamentarians in the Grand National Assembly and hold a special session to discuss matters concerning children's issues.
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8: ISRAEL LIFE SCIENCE NEWS
8.1 Teva Receives Favorable Court Decision Regarding Seasonique
Teva Pharmaceutical Industries announced that the U.S. District Court for the District of Nevada has granted Teva's Motion for Summary Judgment with respect to the validity of U.S. Patent No. 7,320,969. In March 2008, Duramed, now Teva Women's Health, brought suit in the District of Nevada against Watson alleging infringement of Teva's patent as a result of Watson's filing of an Abbreviated New Drug Application (ANDA) for Seasonique. The ANDA sought approval to market a generic version of Seasonique in the U.S. before the patent expires on January 30, 2024. Teva's motion sought judgment on the remaining liability issue in the case, as Watson had previously conceded infringement of Teva's patent. Since the Court granted Teva's motion in its entirety, trial is unnecessary. Separate litigation is pending in the United States District Court for the District of New Jersey with respect to Mylan/Famy Care's and Lupin's ANDAs for Seasonique. Teva is currently analyzing the impact of this decision on those cases. Teva Pharmaceutical Industries (http://www.tevapharm.com), headquartered in Israel, is among the top 15 pharmaceutical companies in the world and is the leading generic pharmaceutical company. (Teva 01.04)
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8.2 Can-Fite Steps Forward to Last Stage of Its Phase I/II Liver Cancer Study with the CF102 Drug
Can-Fite BioPharma reported progress in the clinical development of CF102, the second drug in its pipeline of A3 receptor agonists. The company is studying CF102 as a treatment for liver disease, including liver cancer (hepatocellular carcinoma, or HCC) and hepatitis C. The results announced today concern a Phase 1/2 clinical trial of CF102 in the treatment of patients with advanced HCC. The company has completed patient recruitment for the second of 3 stages of the trial, and has successfully conducted an interim safety review of all patients enrolled to date. This protocol-specified review, conducted by the trial's Clinical Safety Committee, judged CF102 to be safer and well-tolerated at the tested dose levels. The Committee therefore authorized progression to the third stage of the study, in which newly-enrolled patients will receive a higher dose level of the drug. After this stage, the Clinical Safety Committee will perform another review and provide recommendations regarding the optimal dose of CF102 to use in an expanded, fourth stage of the HCC trial. Sales of the only drug approved for the treatment of HCC are currently $850 million and are expected to reach $1 billion in 2010.
Petah Tikva's Can-Fite Biopharma (http://www.canfite.com) is a public company traded on the Tel Aviv Stock Exchange. The Company, which commenced business activity in 2000, focuses on the development of small molecule-based drugs that bind to receptors of cancerous or inflammatory cells and inhibit their development. The leading drug of the company, CF101, is under advanced clinical development for inflammatory diseases and the second drug, CF102 is being developed for liver diseases, including liver cancer and viral Hepatitis C. Can-Fite has vast clinical experience. Thus far 700 patients participated in clinical trials done by the company. (Can-Fite 01.04)
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8.3 Teva Settles Generic Eloxatin Litigation
Teva Pharmaceutical Industries announced that patent infringement litigation pertaining to Teva's generic version of sanofi-aventis and Debiopharm's Eloxatin (oxaliplatin injection) has been dismissed by the United States District Court for the District of New Jersey pursuant to a settlement between the parties. The settlement, which provides for a full release of Teva, includes an injunction prohibiting Teva from selling its oxaliplatin injection product and a license to reenter the market at a later point in time. Teva anticipates continued sales of its oxaliplatin injection at least through June 30, 2010, and will resume shipping additional units August 9, 2012, subject to acceleration under certain contingencies. Teva Pharmaceutical Industries (http://www.tevapharm.com), headquartered in Israel, is among the top 15 pharmaceutical companies in the world and is the leading generic pharmaceutical company. (Teva 01.04)
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8.4 Rosetta Genomics Processing Fine-Needle Aspirate Cell Block Samples for Lung Cancer Subclassification
Rosetta Genomics announced today physicians are able to send FNA cell block samples to Rosetta Genomics' CLIA-certified and CAP-accredited laboratory in Philadelphia for analysis using Rosetta's miRview squamous test. FNA is a less invasive method to obtain tumor cells compared with tumor resections or biopsies. This breakthrough will enable patients and physicians to benefit from a highly accurate diagnostic assay without having to undergo a more invasive procedure. miRview squamous is a molecular diagnostic test that measures the expression level of a single microRNA to accurately differentiate squamous from non-squamous NSCLC. The test offers patients and physicians a highly accurate diagnostic tool that produces standardized and reproducible results. Lung cancer is the leading cause of cancer mortality in the U.S., killing more than 160,000 Americans annually. In over 60,000 of these patients with NSCLC, identification of the squamous sub-type has significant clinical implications. Squamous lung cancer carries increased risk of severe or fatal bleeding for certain targeted biological therapies, including bevacizumab (Avastin) and other drugs under development.2 Other approved therapies, such as pemetrexed (Alimta) are indicated for non-squamous NSCLC only.3
Rehovot's Rosetta Genomics (http://www.rosettagenomics.com) is a leading developer of microRNA-based molecular diagnostics. Founded in 2000, the company's integrative research platform combining bioinformatics and state-of-the-art laboratory processes has led to the discovery of hundreds of biologically validated novel human microRNAs. Building on its strong patent position and proprietary platform technologies, Rosetta Genomics is working on the application of these technologies in the development of a full range of microRNA-based diagnostic tools. (Rosetta 05.04)
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8.5 Teva's Copaxone Reaches One Million Patient Years of Experience in the Treatment of MS
Teva Pharmaceutical Industries announced that Copaxone (glatiramer acetate injection), has now achieved one million patient years of experience in the treatment of relapsing-remitting multiple sclerosis (RRMS). This analysis is based on internal data submitted annually to the U.S. Food and Drug Administration (FDA). Approved in 1996, Copaxone was the first, non-interferon treatment for RRMS. A prospective, clinical trial of more than 19 years is still ongoing and its data reinforce the established efficacy and safety profile of Copaxone. Copaxone is indicated for the reduction of the frequency of relapses in RRMS, including patients who have experienced a first clinical episode and have MRI features consistent with multiple sclerosis. The most common side effects of Copaxone are redness, pain, swelling, itching or a lump at the site of injection, flushing, rash, shortness of breath, and chest pain. Teva Pharmaceutical Industries (http://www.tevapharm.com), headquartered in Israel, is among the top 15 pharmaceutical companies in the world and is the leading generic pharmaceutical company. The company develops, manufactures and markets generic and innovative pharmaceuticals and active pharmaceutical ingredients. (Teva 12.04)
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8.6 PROLOR Awarded Israeli Grant for Human Growth Hormone Program
PROLOR Biotech announced that the Israeli Office of the Chief Scientist (OCS) has approved a 2010 continuation of its grant to PROLOR's Israeli-based R&D subsidiary for the company's development program for hGH-CTP, its proprietary longer-acting version of human growth hormone (hGH). Human growth hormone is indicated for the long-term treatment of children and adults with growth hormone deficiency due to inadequate secretion of endogenous growth hormone. hGH is also sometimes used to counter involuntary weight loss and for certain physical manifestations of aging. Currently available forms of hGH must be injected daily. In contrast, clinical data to date suggests that hGH-CTP, PROLOR's biobetter form of growth hormone, has the potential to require only bi-monthly or weekly injections. PROLOR recently reported positive results from a Phase I trial of hGH-CTP. In this study, hGH-CTP met all safety and tolerability endpoints at all doses and for all participants, and showed that it has the potential to reduce required dosing frequency from one injection per day to just two injections per month. Based on these positive early results, the OCS approved a special continuation grant to support the further clinical development of PROLOR's hGH-CTP during 2010. The grant is designed to provide cash reimbursements for up to $1.6 million of the expenses paid for hGH-CTP product development during 2010.
Nes Ziona's PROLOR Biotech (http://www.prolor-biotech.com) is a biopharmaceutical company applying unique technologies, including its patented CTP technology, primarily to develop longer-acting, biobetter, proprietary versions of already approved therapeutic proteins that currently generate billions of dollars in annual global sales. The CTP technology is applicable to virtually all proteins and PROLOR is currently developing long-acting versions of human growth hormone, which is in clinical development, and interferon beta, factor VII, factor IX and erythropoietin, which are in preclinical development, as well as GLP-1 and other therapeutic peptides. (PROLOR 12.04)
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8.7 Roche Acquires Medingo & Expands in the Growing Insulin Delivery Systems Market
Basel, Switzerland's Roche and Elron Electronics signed an agreement under which Roche will acquire 100% of Medingo, a majority-owned subsidiary of the Elron group. Medingo is engaged in the development of a semi-disposable insulin patch pump. Under the terms of the agreement, Roche will pay Medingo's shareholders an upfront payment of $ 160 million as well as up to 25% of the upfront payment in performance related milestones. The new Medingo micro pump insulin delivery system consists of two parts: a semi-disposable insulin dispensing patch and a remote control, which allows for discreet personalized insulin delivery. It provides the functions of a conventional insulin pump alongside with all advantages of the innovative tubeless patch pump technology. Features like the ability to administer an insulin bolus directly from the patch pump without a remote control, as well as the option to temporarily disconnect the pump from – and later reconnect it to – the patch securing it to the skin, offer enhanced convenience to insulin pump users. The Medingo patch pump is not yet marketed. In a next step, production capacities will be scaled-up to prepare for global launch which is expected by 2012.
The acquisition will strengthen Roche Diabetes Care's position in the fast growing segment of insulin delivery systems. In 2009, the insulin delivery system global market was estimated at CHF 1.6 billion. While the whole market is growing rapidly, the expectations for the growth of the patch pump segment are even higher.
Yokneam's Medingo (http://www.medingo.com) develops cutting edge technologies for the welfare of people living with diabetes. Through a unique blend of scientific collaboration, advanced engineering expertise and over 300 years of combined medical device experience, Medingo's sole objective is to meet the requirements and needs of the diabetes community by introducing miniature devices of superior technology, design and value. The company's flagship product, the Solo Insulin Patch Pump System, is the result of intensive customer research and cutting-edge development that resulted in a multitude of significant patents. Tel Aviv's Elron Electronic Industries (http://www.elron.com), a member of the IDB Holding group, is a high-technology holding company traded in the Tel-Aviv Stock Exchange. (Roche 13.04)
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9: ISRAEL PRODUCT & TECHNOLOGY NEWS
9.1 Optibase Introduces World's First Encoding Platform with up to 104 HD and SD Channels
Optibase unveiled its new high performance MGES 6000 quad-channel encoding blade at the 2010 National Association of Broadcasters (NAB) show on April 12-15 in Las Vegas. MGES 6000, the first truly converged encoding module, provides 4 HD & SD channels in a single blade. Up to 13 blades may be combined for an unprecedented 52 channels in a single platform. Secondary stream functionality doubles streaming capacity to 104 streams at two different bit rates. The flexible second generation MGES 6000 H.264 HD encoder offers a full range of bit rates and resolutions that make it ideal for diverse applications. These include situation awareness for military forces; traffic monitoring, surveillance and collaboration between government agencies; and Telco and broadcast services. The bandwidth-efficient second generation MGES 6000 maximizes available bandwidth with H.264 CBR encoding that enables delivery of more HD channels at superior quality. It provides a cost-effective solution for a wide range projects, from very small installations to large-scale deployments.
Herzliya's Optibase (http://www.optibase.com) provides video over IP solutions, specializing in video encoding, decoding and streaming for federal and state government agencies, Telco operators, enterprise organizations and the world's leading broadcast service providers. With a collection of open, standards-based products, Optibase enables its customers to take full advantage of video distribution over their IP network, ensuring superb video quality in a scale of bit-rates for simple and effective video streaming to desktops, STBs and VOD applications. Optibase has recently started operating in the fixed-income real-estate sector. (Optibase 01.04)
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9.2 ActionBase & ClusterSeven Provide Complete Risk Management for Spreadsheet Processes
ActionBase and New York's ClusterSeven today announced a joint solution that is immediately available to manage, monitor and control the risks associated with daily processes managed by using e-mail and spreadsheets. The combined offering provides an added layer of management and control on top of familiar Microsoft Excel spreadsheets and Microsoft Outlook environments to help enable risk management, compliance and business efficiencies for organizations, financial institutions and Fortune 500 financial reporting divisions. ActionBase, a company developing adaptive case management and human process management solutions, is working with ClusterSeven, a provider of spreadsheet management solutions, to automate a system of record that manages the entire spreadsheet lifecycle and associated e-mail processes. The solution helps organizations with all levels of reporting, from individual status reports through corporate-level reporting for trends and compliance.
Tel Aviv's ActionBase (http://www.actionbase.com) is a pioneer of human process management and adaptive case management solutions that enable businesses – more than 150 Fortune 100 to Fortune 500 organizations worldwide – to manage their business critical processes. The company supports an ad-hoc and dynamic working environment by providing full visibility and control over unstructured processes that were previously managed via plain documents and e-mail correspondence. ActionBase works with global IT leaders including Orange, Texas Instruments and Amdocs, and specializes in complex industries such as oil and gas, utility and telecommunications. (ActionBase 05.04)
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9.3 DHS Selects Waterfall Security Solutions' as part of its new National Cyber Security Test-bed at the INL
Waterfall's Unidirectional Security Gateways were selected to be an integral part of the Department of Homeland Security's (DHS) Control Systems Security Program new cyber security test-bed. This test-bed, located and operated by the Idaho National Labs (INL), is an environment where control and monitoring systems, including Supervisory Control and Data Acquisition (SCADA) systems, energy management systems, process control systems (PCS), distributed control systems, and third-party security components are evaluated for cyber security vulnerabilities. The Control Systems Security Program (CSSP) of the DHS is tasked with the responsibility of reducing vulnerabilities in Industrial Control Systems that support and manage the United States critical infrastructures. Control systems underlie a significant part of the nation's critical infrastructure and are vulnerable to cyber and physical attacks by adversaries that could result in loss of life, severe economic impact, or both. Waterfall's technology, accompanied with its multitude of available Waterfall Connectors, provides out-of-the-box integration and support for the majority of industrial applications, historian systems and SCADA protocols.
Tel Aviv's Waterfall Security Solutions (http://www.waterfall-security.com) is the leading provider of Unidirectional Security Gateways and data diodes for Control networks, SCADA systems, Remote Monitoring and Segregated Networks. Waterfall's security solutions assist Utilities and Critical Infrastructures to easily and comfortably achieve compliance with NERC-CIP, NRC, NIST and other regulations as well as cyber-security best practices. (Waterfall 01.04)
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9.4 TowerJazz Announces VectraWave's First 40G Circuit Designed Using SiGe BiCMOS Process
TowerJazz announced that France's VectraWave has designed its first 40G high speed coder circuit using a Silicon Germanium (SiGe) BiCMOS process. VectraWave chose TowerJazz's SBC18HX process over Indium Phosphide (InP), the traditional semiconductor material for choice for 40G circuits, due to its advantage of integrating digital circuits on the same die enabling lower cost, lower power consumption, better temperature compensation and smaller total board area. TowerJazz's industry leading SBC18HX also provides a wide variety of optimized process options and a well defined path to higher performance while maintaining existing analog IP. VectraWave is developing a family of products including 43 Gbps high speed logic integrated circuits with a sub family of 43 Gbps high speed coders. In fact, VectraWave demonstrated a unique NRZ to RZ-DPSK coder operating up to 43Gps in a less than 1 square mm surface. Applications for these chips are data synchronization and fiber transmission. The markets for VectraWave's devices are high speed logic circuits for RF communication equipment, long haul/ultra long haul and metro access 10 to 100 Gbps optical networks. Its family of high speed coders allows the conversion of 5 to 43 Gbps NRZ standard bit rates to the specific coding format required by the optical fiber transmission link. Migdal HaEmek's Tower Semiconductor (http://www.towerjazz.com) and its fully owned U.S. subsidiary Jazz Semiconductor, operate collectively under the brand name TowerJazz, manufacturing integrated circuits with geometries ranging from 1.0 to 0.13-micron. TowerJazz provides industry leading design enablement tools to allow complex designs to be achieved quickly and more accurately and offers a broad range of customizable process technologies including SiGe, BiCMOS, Mixed-Signal and RFCMOS, CMOS Image Sensor, Power Management (BCD), and Non-Volatile Memory (NVM) as well as MEMS capabilities. (Tower Semiconductor 01.04)
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9.5 PrimeSense Supplies 3D-Sensing Technology to "Project Natal" for Xbox 360
Microsoft Corp. and PrimeSense announced that PrimeSense will be providing its leading-edge 3D-sensing technology for use in "Project Natal" for Xbox 360. PrimeSense has delivered an important component to the Xbox technology, helping Microsoft deliver revolutionary controller-free entertainment experiences in the living room. PrimeSense's technology enables a paradigm shift in the way people interact with consumer electronic devices. The engagement with Xbox 360 establishes PrimeSense's position as a leading supplier of 3D-sensing technology. Xbox 360 Hardware Engineering teams developed the ‘Project Natal' sensor based on the PrimeSensor reference design to support the special requirements of ‘Project Natal.' Microsoft recently announced at the Consumer Electronics Show in Las Vegas that "Project Natal" will be available during holiday 2010.
Tel Aviv's PrimeSense (http://www.primesense.com) is the leader in sensing and recognition technologies enabling consumer devices to "see" environments and allow users to control and interact naturally with those devices in a simple and intuitive way. PrimeSense offers affordable solutions for consumer markets including visual/home computing, interactive entertainment and consumer electronics. PrimeSense products include the PS1080 System on Chip and PrimeSensor reference design, plus cross-platform enabling software to make application development easy and intuitive. (Microsoft 30.03)
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9.6 Doe Run Shortens Downtime With iSolve Virtual Knowledge Manager
Softlib Software announced that St. Louis' Doe Run, Inc., the largest integrated lead producer in the Western Hemisphere, has deployed SoftLib's iSolve software for its IT organization. iSolve now helps Doe Run IT staff locate the right solutions for technical incidents quickly and easily, thus improving time to resolution and reducing downtime substantially. Doe Run's IT organization was looking to improve end user satisfaction and to reduce the time of experts supporting incidents. The solution of choice had to fit into their Information Technology Infrastructure Library's (ITIL) initiative and had to help the experts locate solutions in a variety of information sources - internal and external. iSolve intelligent search and Federated Knowledge Management capabilities helped Doe Run IT leverage home grown knowledge automatically while seamlessly integrating with existing systems such as their Service Desk system. This allows Doe Run's IT organization provide immediate service to knowledge workers while reducing escalations and saving experts time.
Lod's Softlib (http://www.softlibsw.com) is a leading provider of Solution Identification software, enabling our customers to reduce costs substantially while improving service to end users and customers. We bring innovative solutions to the marketplace that revolutionizes the way technical support is delivered. Softlib products are used on thousands of computers worldwide. Among our customers are financial institutions, telecom companies, technology vendors and government agencies. (Softlib 06.04)
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9.7 Autodesk Media and Entertainment Selects Mellanox to Accelerate Multimedia
Mellanox Technologies announced that the company's ConnectX-2 Virtual Protocol Interconnect adapter cards, supporting 40Gb/s InfiniBand and 10 Gigabit Ethernet, and IS5030 40Gb/s InfiniBand switch systems with FabricIT fabric management software are included in Autodesk, Inc.'s applications: 2010 and 2011 versions of Autodesk Smoke, Autodesk Flame, and Autodesk Lustre creative finishing products. These Autodesk pre-configured systems provide digital artists and post-production professionals with fast access to file-sets as well as the power to accelerate on-the-fly rendering of in-session color grading decisions and HD and 2K real-time interactivity. Autodesk, Inc., is a world leader in 2D and 3D design, engineering and entertainment software for the manufacturing, building and construction, and media and entertainment markets. Yokneam's Mellanox Technologies (http://www.mellanox.com) is a leading supplier of end-to-end connectivity solutions for servers and storage that optimize data center performance. Mellanox products deliver market-leading bandwidth, performance, scalability, power conservation and cost-effectiveness while converging multiple legacy network technologies into one future-proof solution. (Mellanox 12.04)
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9.8 Mellanox Provides Complete Portfolio of 40Gb/s Cable Interconnect Products
Mellanox Technologies announced the availability of its complete family of 40Gb/s InfiniBand cable solutions that complements its portfolio of InfiniBand adapter cards and switch systems. The cable product line provides cost effective connectivity with signal integrity and bit error rates (BER) that exceed industry standards, ensuring trouble-free cluster installation, bring-up and performance over the life of the network. Mellanox 40Gb/s cables exceed the IBTA 1.2.1 and SFF-8436 QSFP connector standards and are 100% tested to strict quality requirements. Cables are available in a variety of options to suit the different power, length and flexibility needs of the data center. Passive copper cables are available in lengths from half-meter to eight meters. These cables are preferred by IT managers for top-of-rack switch connections or small server cluster installations due to their low cost and use of no additional power. Low power active copper cables are available from eight meters up to 12 meters. These cables, using less than 500mW per end, extend the distance between servers and switches to build data centers consisting of thousands of servers. The eight meter active cable is slimmer and lighter than the passive version reducing the weight that the cable management needs to support. Assembled optical cables with the industry's lowest power of less than one Watt per end are available up to 300 meters providing very lightweight and flexible connectivity between servers and switches and extends the reach to across the room or between floors.
Yokneam's Mellanox Technologies (http://www.mellanox.com) is a leading supplier of end-to-end connectivity solutions for servers and storage that optimize data center performance. Mellanox products deliver market-leading bandwidth, performance, scalability, power conservation and cost-effectiveness while converging multiple legacy network technologies into one future-proof solution. (Mellanox 12.04)
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10: ISRAEL ECONOMIC STATISTICS
10.1 Israel Sees Increase in Working & Poor Families
On 6 April, the Bank of Israel published an excerpt from its 2009 Annual Report on working families. The central bank reiterates what the National Insurance Institute is saying: "finding employment does not guarantee escaping from poverty."
The Bank of Israel states that the incidence of poverty in Israel among individuals in families with one wage earner rose from 20.4% in 1997 to 36.3% in July 2008-June 2009. For the sake of comparison, the average poverty rate among individuals in families with one wage earner in the OECD was 7.7% in the mid-2000s. The poverty rate among individuals in families with two wage earners is substantially lower, but the trend has been steadily worsening, rising from 2.1% in 1997 to 5.1% in 2009. In other words, tens of thousands of Israeli families with two wage earners are unable to escape the circle of poverty.
The Bank of Israel notes that the cuts in benefits, instituted in 2003, was necessary to increase the incentive to join the labor force, but that it resulted in non-working poor finding jobs at the bottom of the wage scale, because they had low earning capacity, due to a lack of education or inappropriate jobs skills. Whereas in Europe, no clear correlation has been found between low wages and poverty, except for low work hours, in Israel, low wages has a clear contribution to poverty levels, together with large family sizes, and weak enforcement of labor laws, which results in many people working for less than the minimum wage. The Bank of Israel cites an OECD report on Israel, which said that the number of inspectors dealing with labor-law enforcement is less than a quarter of the ILO benchmarks for the number of workers per inspector.
The Bank of Israel says that one of the main policy measures, which has marked positive effects on the welfare of individual workers is the negative income tax, or earned income tax credit (EITC), and was introduced into several locations in Israel in October 2008. However, two factors mitigated its effect in Israel: it only operates in a few locations (the Ministry of Finance insists on linking expansion of the negative income tax to expansion of the Wisconsin program, which is stuck in the Knesset), and the relatively low level of the grant, compared with other countries. (Globes 06.04)
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10.2 Israelis Feel Local Products Are Better
Israelis prefer locally made products and believe that goods made in Israel are better than imported goods, according to a Ministry of Industry, Trade & Labor poll. However, despite this preference, Israelis are not always adamant about purchasing local goods, the poll found. According to the survey, 63% of Israeli consumers believe that buying local products would minimize unemployment in the country, while 87% agree that local goods are better than similar import. In addition, 48% of respondents said they would prefer to purchase a local product even if it was up to 5% more expensive than a similar import. On the other hand, 36% said they would prefer to buy goods produced abroad in that case. The poll comprised a representative sample of 1,200 respondents and aimed at looking into the potential to change the purchasing habits of Israeli consumers. The Ministry of Industry, Trade & Labor and the Industrialists Union have embarked on a broad campaign aimed at convincing the Israeli public that buying local products helps in preventing layoffs. However, despite the campaign, many government ministries still prefer to purchase foreign goods that are cheaper than local products. Meanwhile, workers' unions and Israel's major companies purchased roughly $550 million in imported goods over the Passover holiday. (Y-Net 12.04)
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10.3 Tourists Flock To Israel In Record Numbers During March
Incoming tourism to Israel enjoyed a new record in March. The Ministry of Tourism reported that 313,000 tourists visited Israel, 56% more than March 2009, 17% more than March 2008 and 9% than the previous record in March 2000. March tourism this year was boosted by the fact that Passover started in March for the first time since 2002, while Easter weekend (Good Friday) began on April 2. In January-March 2010, 747,000 tourists visited Israel, a rise of 54% compared with the corresponding period last year, and15% more than the first three months of 2008. According to the Central Bureau of Statistics, 216,000 tourists arrived by air, 42% more than in March 2009 and 15% more than March 2008. Of these tourists 9,100 arrived on direct flights to Eilat, an increase of 42% over March 2009. Some 14,300 tourists visited Israel on cruise ships last month. No cruise ships visited Israel in March 2009 and only 400 tourists visited Israel on cruise ships in March 2008. (Globes 13.04)
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10.4 Israelis Spent NIS 4.2 Billion on Passover Purchases
Israelis spent NIS 4.2 billion on Passover purchases, a rise of 5% over last year. Most of the increase was due to higher expenditure on food, fuel and vacations abroad. The Federation of Israeli Chambers of Commerce (FICC) estimates that the average Israeli household spent NIS 2,000 during the week-long holiday (29 March – 6 April) - a similar sum to 2008. Investigations conducted by the FICC's economics department showed that while there was more consumption than during a non-holiday period, this was characterized by purchases at discount stores and stores with special offers. The FICC estimates that Israelis spent NIS 1.9 billion not including food during the holiday, which it also said is a similar figure to 2008. This non-food expenditure included fuel and transport (20%), travel abroad (15%), culture and entertainment (13%), clothing and footwear (12%), eating out (12%), trips and recreation (10%) and electrical and household goods (5%). In addition, during the month preceding Passover, the number of jobs grew by 15,000, mainly in the accommodation, catering and transport sectors. (Globes 06.04)
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10.5 Hebrew University Again Tops Revenue Table
The Hebrew University of Jerusalem has kept its top ranking of many years standing as Israel's academic institution with the largest revenue, according to Dun and Bradstreet Israel's 2010 ranking of universities and colleges. Although Hebrew University's revenue fell slightly to NIS 2.28 billion in 2009 from NIS 2.31 billion in 2008, it kept its strong lead in the rankings. Most of Hebrew University's revenue - NIS 1.8 billion - came from government subsidies. NIS 249 million came from tuition, and NIS 215 million from donations. The university has 22,950 students and 1,012 faculty.
The Technion Israel Institute of Technology rose to second place from third place in 2009, changing positions with Tel Aviv University. The Technion had NIS 2 billion in 2009, compared with NIS 1.66 billion in 2008. Its revenue included NIS 786 million in government subsidies, NIS 98 million in tuition, and NIS 1.1 billion in donations. It has 12,462 students and 587 faculty.
Third-ranked Tel Aviv University's revenue edged up to NIS 1.95 billion in 2009 from NIS 1.9 billion revenue in 2008. The Weizmann Institute of Science is in fourth place, with NIS 1.6 billion revenue in 2009, down slightly from NIS 1.63 billion in 2008. Fifth-ranked Ben Gurion University of the Negev had the largest jump in revenue, up 25% from NIS 1.19 billion in 2008 to NIS 1.4 billion in 2009. The 6th to 10th places remained as they were in the two preceding years. Bar Ilan University is in sixth place, with NIS 1.2 billion revenue; the University of Haifa is in seventh place with NIS 676 million revenue; and the Open University in eighth place with NIS 455 million in revenue, 73% of which comes from tuition and just 23% from government subsidies. The Open University has the largest student body, at 44,000.
The College of Management is in ninth place, with NIS 269 million revenue, 99% of which comes from tuition. As a private college, its tuition is almost triple the tuition of the public universities. The Ariel University Center of Samaria closes the top ten rankings, with NIS 196 million revenue in 2009. Analysis of the figures indicates that most of the top ten academic institutions increased their revenue in 2009, except for slight drops by the Hebrew University and the Weizmann Institute. The figures also indicate that tuition income at the top ten academic institutions rose more quickly than the growth in their student bodies, pointing to an increase in tuition fees. (Globes 11.04)
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11: In Depth
11.1 ISRAEL: Israel Aid Pays U.S. Dividends That Exceed Cost
On 7 April, US Congressman Steve Rothman (D-N) wrote that the argument that American military aid to Israel is damaging to the U.S. is not only erroneous, it hurts the national security interests of this country and threatens the survival of Israel. U.S. support for Israel is essential, not only for Israel's national security, but for America's. Every bit of that support - and more - withstands all reasonable scrutiny.
Under the 2010 U.S. budget, about $75 billion, $65 billion and $3.25 billion will be spent on military operations and aid in Afghanistan, Iraq and Pakistan during this fiscal year, respectively. Israel will receive $3 billion, in military aid only. There is no economic aid to Israel, other than loan guarantees that continue to be repaid in full and on time.
There isn't enough space here to discuss the relative merits of the expenditures in these other countries, but we already know the critically important return the U.S. gets for helping its oldest, most trusted ally in the strategically important Middle East - the most powerful military force in that region, the pro-U.S., pro-West and democratic Jewish state of Israel.
Here's how: First, it's important to remember that about 70% of the $3 billion aid must be used by Israel to purchase American military equipment. This provides real support for U.S. high- tech defense jobs and contributes to maintaining our industrial base. This helps the U.S. stay at the very top in the manufacturing of our own cutting-edge military munitions, aircraft, vehicles, missiles and virtually every defensive and offensive weapon in the U.S. arsenal - with the added contribution of Israel's renowned technical know-how.
Research Cooperation: Second, the U.S. and Israel are jointly developing state- of-the-art missile defense capabilities in the David's Sling and Arrow 3 systems. These two technologies build on the already successful Arrow 2, jointly developed by our two countries, which is already providing missile defense security to Israel and U.S. civilians and ground troops throughout the region. The knowledge the U.S. gains from these efforts also has a positive multiplier effect on applications to other U.S. military and non-military uses and U.S. jobs.
Third, given Israel's strategic location on the Mediterranean, with access to the Red Sea and other vital international shipping and military lanes of commerce and traffic, it is critically important to the U.S. that Israel continues to serve as a port of call for our troops, ships, aircraft and intelligence operations.
Forward Base: Israel also has permitted the U.S. to stockpile arms, fuel, munitions and other supplies on its soil to be accessed whenever America needs them in the region.
Fourth, America's special relationship with Israel provides the U.S. with real-time, minute-to-minute access to one of the best intelligence services in the world: Israel's. With Israeli agents gathering intelligence and taking action throughout the Middle East and, literally, around the world, regarding al- Qaeda, Hezbollah, Iran and Hamas, among others, the U.S. receives invaluable information about anti-U.S. and terrorist organizations and regimes.
Fifth, imagine the additional terrible cost in U.S. blood, and the hundreds of billions more of American taxpayer dollars, if Saddam Hussein had developed nuclear weapons, or if Syria possessed them.
Then remember that it was Israel that destroyed the almost- completed nuclear reactor at Osirak, Iraq, in 1981.
Foiling Iran: Think about the many operations that Israel's Defense Forces and intelligence agents have undertaken to foil, slow and disrupt Iran's efforts to develop a nuclear weapons capability. A nuclear-armed Iran would threaten the lives of hundreds of thousands of Americans in the region, all of Iran's Arab neighbors, the world's largest oil supplies and those who rely on that oil. It also would provide anti-U.S. terrorists with access to the most lethal Iranian technology and probably set off a nuclear arms race in the region.
For about 2% of what the U.S. spends in Afghanistan, Iraq and Pakistan this year, Americans can take pride in the return on our investment in aid to Israel.
With Israel's truly invaluable assistance to America's vital national security, we can take comfort that -- in actions seen in Tehran and Damascus and noticed by al-Qaeda and other anti-U.S. terrorists everywhere - the U.S. is safer and made more secure because of the mutually dependent and beneficial relationship between the U.S. and Israel. (Steve Rothman is a Democratic congressman from New Jersey who serves on the House committees responsible for U.S. military and foreign aid. The opinions expressed are his own.) (Businessweek06.04)
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11.2 IRAQ: Coalition-Courting Politics
The Economist Intelligence Unit reported that the Iraqi general election has thrown up an inconclusive result. The final outcome will depend on a secondary contest between the two leading parties to form a majority bloc in parliament. If neither party can manage this, they may find that they have no option but to go for a government of national unity. Ayad Allawi, whose cross-sectarian Iraqiya alliance won the largest number of seats, would appear to have a slender advantage having technically "won" the election. However, his main rival, Nouri al-Maliki, the prime minister and leader of the second-placed State of Law Alliance (SLA), has the advantage of the incumbency.
The Independent High Electoral Commission (IHEC) announced the final results of the election on 26 March; almost three weeks after the votes were cast on the seventh of the month. It had been clear as the interim results came in that Mr. Allawi's bloc was likely to emerge just ahead of Mr. Maliki's SLA. It ultimately came down to just two seats, with Iraqiya securing 91 of the total 325 and SLA getting 89. The key to Mr. Allawi's success was his appeal to Sunni Arab voters, who had largely boycotted the previous elections in 2005 in protest at their perceived marginalization in the face of Shia dominance of post-Saddam Hussein Iraq. Although Mr. Allawi is of Shia origin, he presents himself as a secular nationalist. Iraqiya won two-thirds of the seats in the four mainly Sunni provinces (Anbar, Ninewa, Diyala and Salaheddin), pushed Mr. Maliki close in Baghdad, with 24 of the 68 seats to 26 for the SLA, and managed to take half of the 12 seats in Kirkuk, in a major rebuff to the Kurdish alliance. Mr. Allawi won only 10% of the seats in the Shia-dominated south, but this compares well with Mr. Maliki's tally of just one seat in the Sunni provinces.
Trading up
The IHEC is expected to ratify the result - having considered an array of complaints, mainly from the Maliki camp - by the end of the month. There will then be an initial period of 30 days for the MPs to agree on the appointment of a president. This could well be part of a package including a deal on the prime minister and the share-out of cabinet seats, but if these matters are not resolved, there is provision for a further 30 days of deliberations.
Both Mr. Allawi and Mr. Maliki are now lobbying the other main groups in an effort to build a coalition of at least 163 seats. In theory, each bloc could muster a majority through joining forces with the Islamist Shia Iraqi National Alliance (INA) and with some of the minority players. In practice, however, it would be hard to govern effectively without the main Kurdish alliance being represented in the government. The Kurds have not had an altogether happy relationship with Mr. Maliki, who has prevaricated on their demand for a referendum on Kirkuk's future and has erected obstacles in the way of the development of oilfields in the Kurdish Regional Government (KRG) area. Mr. Allawi has also done little to endear himself to the Kurds, in particular owing to his close association the al-Nujaifi brothers - Osama (elected as an Iraqiya MP in Mosul) and Atheel (the governor of Ninewa province) - who have antagonized Kurds through their aggressive promotion of Sunni Arab interests in the north. However, Mr. Allawi's strong political position in the north - in particular his electoral gains in Kirkuk - means that the Kurds will have to deal with him in some capacity as they pursue their core objectives of resolving Kirkuk's status and securing the central government's blessing for their oil export plans. The Kurds have been on better terms with the INA, but this has been mainly because of the federalist stance of the Islamic Supreme Council of Iraq (ISCI), whose influence within the Shia alliance has been eroded as the fortunes of Sadrist tendency have risen.
Moqtada's call
The Kurds are likely to wait to see which way the INA chooses to go before making their own choice between Mr. Allawi and Mr. Maliki. The Sadrist tendency, fiercely loyal to Moqtada al-Sadr, a radical cleric who has spent most of the past two years in Iran, is very much the dominant force in the INA, with 40 of the bloc's total 70 seats; ISCI has only 18, with most of the remainder shared between the Islamic Virtue (Fadhila) party and independents. This puts Mr. Sadr in a strong position to determine the complexion of the new government. Much will depend on how far Mr. Allawi and Mr. Maliki are prepared to go to accommodate his demands, with respect to both policy and cabinet representation. Mr. Sadr has in the past emphasized his interest in social policy, in particular health. There should be little problem in satisfying him on this score. Things might become more complicated if he were to press for more influential posts such as minister of oil or the interior.
Sunnis on side
Mr. Maliki has expressed confidence that he can in effect recreate the Shia-Kurdish coalition that was formed after the December 2005 election. However, this would entail acknowledging his failure to turn the SLA into a cross-sectarian force capable of providing an avenue for Sunni Arab participation in the political process. A coalition led by Mr. Allawi, including the INA and the Kurds, would offer a better balance between Iraq's sects and ethnic groups, and would be better placed to improve Iraq's relations with it fellow Arab countries. Mr. Maliki has quarreled with Syria and has always been regarded with suspicion by Saudi Arabia. Mr. Allawi, by contrast, has built up solid relationships with the leaders of most of the leading Arab states.
American preference?
The US has maintained an outward stance of neutrality, but there is little question that it would much prefer to see Mr. Allawi in charge as it prepares to draw down its forces, to just 50,000 in August this year and with a full withdrawal by end-2011. Mr. Maliki and the US have had no option but to work together on security matters, but the relationship has never been particularly warm on either side. US officials find it much easier to communicate with Mr. Allawi - not least owing to his command of English, having been based in the UK for almost 40 years - and they broadly approve of his secularist outlook and his inclusive attitude towards the Sunni Arab minority.
Iran, by contrast, is likely to be marginally in favor of Mr. Maliki, as an SLA-INA-Kurdish government would have a stronger Shia bias, and would probably be less stable, offering more opportunities for Iran to exert influence over internal Iraqi affairs. (ViewsWire 06.04)
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11.3 KUWAIT: Gassing Up
With the world's fourth-largest oil reserves and synonymous as an energy powerhouse, many would find it surprising to learn that Kuwait is presently a net importer of gas. Therefore the discovery and development of its domestic gas resources are of vital importance to the country as it looks to not only secure and expand its foreign account balance, but also fulfill its growing domestic utility needs with a cleaner and more efficient alternative to oil.
Kuwait is estimated to possess 8% of global oil reserves and presently produces 2.78m barrels per day (bpd), accounting for roughly 3.5% of global production, according to the "BP Statistical Review of World Energy June 2009." While it is ranked 18th in gas reserves, it currently extracts a very modest 140m cu feet per day (cfdp), a figure that is not sufficient to meet even its local requirements.
Kuwait is also one of the world's largest per-capita consumers of electricity, especially in summer months when demand soars. It is expected that during the peak demand period of April 1 to late October of this year, Kuwait will be importing liquefied natural gas from global companies at a rate of 500,000 cfpd.
In 2005, an estimated 35trn cf of non-associated gas was discovered in the country's northern fields. But to date, little extraction has taken place. The field contains gas with high concentrations of toxic and corrosive hydrogen sulfur. They are considered technically challenging to manage. In February, the country reached a deal with Royal Dutch Shell, valued at an estimated $700m that will entail the energy giant providing expertise and technology to help tap the complex reservoirs. The five-year "technical services contract" could ultimately see the output from several northern gas fields reach 1bn cfpd.
The move is considered a landmark deal in that not only will it provide a significant boost to the country's domestic utilities capacity, but it also signals a move towards greater collaboration and participation of international oil companies (IOCs) in the country's upstream activity. Sara Akbar, the managing director of Kuwait Energy, an independent oil and gas company operating across the region, told OBG, "The Shell deal is a major turnaround for Kuwait, and should pave the way for IOCs to do more work in the country."
With operating oil fields maturing and newly discovered oil and gas reserves requiring enhanced recovery techniques, Kuwait is considered to be behind its production potential, partly as a result of a clause that bars foreign ownership of hydrocarbon resources. Saedeldeen A Akashah, the chairman of Kuwait Catalyst Company, a solutions provider to the regional refining industry, told OBG, "Oil for Kuwait is a symbol of sovereignty and the country is reluctant to relinquish control. It's a very sensitive issue as in the constitution it states openly that oil belongs to the Kuwaiti people. The government needs to figure out how to strike the right balance between ownership and competitiveness."
Industry players commend the decision to involve Shell in the northern gas fields, pointing to the advances made in other Gulf states' gas output through an open engagement with international companies. Walid K Al Hashash, chairman of Aref Energy Holding Company, told OBG, "Qatar's success in gas, and more recently Saudi Arabia's, came from their national oil companies realizing they cannot produce gas without outside help and expertise. Kuwait Petroleum Company (KPC) has built up the know-how over the years to deal with oil, but gas and heavy oil is new to them. So the Shell deal is a good move and hopefully we'll see similar agreements in gas."
At present, there has been no indication of the new gas capacity that could come on-line being allocated to exports. Instead, it will most likely all be consumed domestically for electricity generation, water desalination and as feedstock to the country's industrial sector - in particular, the petrochemicals sector. Ahmed Mouti, the chairman and managing director for Shell Kuwait, told OBG, "If more gas is produced domestically, not only will this reduce the need for costly imports required to meet local electricity demand, but it can help grow the local petrochemicals industry, which will serve as a critical diversification effort for the country by providing a value-added export revenue stream."
With oil revenues accounting for nearly 90% of the national treasury, many point to the advancement of the petrochemicals sector as a logical and viable means for the country to increase its industrial base and diversify its dependence on oil exports for future income generation. (OBG 12.04)
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11.4 UAE: Training for the Future
The Oxford Business group reported that the education system in Dubai, as well as the rest of the UAE, is about to undergo a massive overhaul, with a series of reforms to be implemented at all levels. In late February, the national Ministry of Education (MoE) unveiled its new Educational Strategy 2010-20, which it describes as a plan that will allow students to match the highest international standards thanks to a restructuring of the curriculum. Under the strategy, which still has to be given final official approval, 50 separate initiatives are to be implemented, with the aim of developing an education system better placed to ensure that students are best equipped for higher education and the workplace.
The education system will be made more flexible, with a restructuring of secondary education to include elective courses, encouragement for students to take part in extracurricular activities and also be more involved in decision-making concerning their own studies. In order to gain public feedback on the strategy, Dubai's ruler, Sheikh Mohammed bin Rashid Al Maktoum, who also holds the offices of UAE vice-president and prime minister, had the 27-page document posted on the prime ministerial website. Though mainly directed at state schools, the strategy will also have an impact on the private education system in Dubai, which currently serves 85% of all pre-tertiary students, one of the highest ratios in the world.
Nationally, 39% of the 1190 schools currently operating in the UAE are private establishments, with the split between private and public being 467 to 723. In Dubai, this ratio is reversed, with just over one-third of all schools being state provided. Of the 224 schools in Dubai, 79 are part of the public education system, with their curricula set by the MoE. The remaining 145 facilities are private schools that between them teach 17 different curricula, including that laid out by the ministry. Though private schools generally follow a separate curriculum from state-funded facilities, all schools in Dubai are monitored by the Knowledge and Human Development Authority (KHDA), the state body set up in 2006 to develop all relevant resource sectors in the emirate.
While the recently announced reforms are to be applied across the national educational system, in Dubai at least some of these measures are already being practiced, according to Abdulla Al Karam, the chairman of the board of directors and director-general of the KHDA. There were strong parallels between the MoE's strategy, which focuses on the needs of students, and what KHDA is aiming to achieve by also concentrating on students as the heart of the education system in Dubai, Al Karam said in a statement issued on February 23. "We are working to provide social, educational and personal development, working with partnerships and through teamwork to achieve our goals," he said. "This practical work focuses on quality, not quantity, while adhering to our principle of transparency."
Quality, in particular at the end of the education process, is at the core of the new strategy, which has as a major objective of improving the skills of students entering higher education. MoE studies have shown that more than 90% of grade 12 graduates that enter UAE higher education require a foundation year of additional classes in order to bring them up to the required levels in a number of key courses, particularly science, mathematics and English. The planned reforms are intended to improve education at secondary level to the point where students graduating the system can move seamlessly into the state tertiary system, resulting in a saving of time, money and valuable resources. According to some estimates, up to one-third of the teaching budget of the nation's three universities is expended on providing foundation year courses.
For this to happen, the overhaul of pre-tertiary education will have to be dramatic, said Mustafa Abu Shagur, the president of Rochester Institute of Technology Dubai, located at Silicon Oasis, with students needing to be taught independent learning so they can better adapt to university and the world beyond education. "Pupils are used to being spoon-fed and this needs to change," he said in an interview with local press on February 25.
While the large-scale revamp of the education system is sure to be expensive, the cost to Dubai and the other emirates will be recouped in future years, both in savings from scrapping the foundation year and earnings generated by a more highly educated population. (OBG 02.04)
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11.5 EGYPT: Egypt Pharmaceuticals and Healthcare Report Q2 2010
Research and Markets' (http://www.researchandmarkets.com) "Egypt Pharmaceuticals and Healthcare Report Q2 2010" says that Egypt's total pharmaceutical spending has been on a steady rise, reaching a calculated $2.47bn by the end of 2009 and forecast to be at $4.25bn by 2014, increasing at a respectable compound annual growth rate (CAGR) of 11.5%. Growth in the next five years will be driven by the drug pricing reform which should make all drugs more affordable, as well as making generics a more attractive option for substitution.
Egypt is improving its attractiveness for foreign direct investment (FDI) in the pharmaceutical sector with a rejuvenation of political interest in the healthcare industry. Drug makers operating in Egypt are expanding their operations with new manufacturing sites and increasing exports. Crucially, higher production capacity and regulation compliance such as current Good Manufacturing Practice (cGMP) certification and other international accreditation standards will allow for higher prices to be charged for medicines marketed in Egypt (within purchasing power) and for a wider range of export destinations. Ultimately, domestic drug makers can only lower prices significantly if production meets economies of scale and exports to more lucrative markets will be the only way to achieve this particularly in Egypt's case where high unemployment and low incomes present a relatively small market for pharmaceutical firms.
Generally, BMI's global view is that patented drug spending as a proportion of total pharmaceutical expenditure will fall. The 2011 patent cliff provides the largest impetus for this shift, while governments in emerging markets are looking at ways of cost saving through generic substitution. Although population growth and epidemiological factors will contribute to a rise in patented drug spending, BMI nonetheless see generic drugs gradually taking up a higher portion of the market share by value in Egypt. Furthermore, domestic drug makers in the country are focused mainly on generic and generic OTC medicines and therefore contribute very little to the patented product list. As a result, patented products from abroad are more expensive owing to import costs and their patented protection status. Innovation and research and development (R&D) are limited in Egypt. While the gradual preference for generic drugs will promote efficient drug spending, developing new medicines that can be patented and branded will raise revenues and promote exports.
Even so, the purchasing power for drugs in the country is low $31.77 per capita in 2009 further limiting the drive for innovation and lowering its attractiveness as an export destination for patented drugs. Recent pricing reforms for patented drugs in September 2009 were designed to keep prices low, but we believe they will remain beyond what many people can afford. Despite concerns from the patented pharmaceutical industry, no recent developments related to this issue have been forthcoming, suggesting that despite the reform, political discussion is still a possibility. (R&M 09.04)
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11.6 LIBYA: Political risks to watch in Libya
An unpredictable succession, suspicion of foreign influence, diplomatic rows, policy uncertainty and the lingering threat of social unrest all pose potential risks for investors in oil-rich Libya. Here are some key factors to watch.
Uncertain Succession: Muammar Gaddafi has led Libya for over 40 years, longer than any living African leader. In his late 60s, he is still relatively young but there is no framework for his succession and he has carefully avoided designating a successor. Analysts say the veteran leader appears to be in good health but that, if he died, years of instability could follow as competing clans and relatives struggle for supremacy. The liberal-leaning Saif al-Islam, who took a central role in ending Libya's stand-off with the West, has the highest profile among Gaddafi's sons but lacks any official role and Libya experts say he has little support from the army, whose endorsement is seen as vital if he is to hold power.
Two other sons, Mutassim and Khamis, are both thought to have stronger power bases in the military. Their policy views, including on the economy and outside investment, remain unknown but Libya watchers see Mutassim - Libya's National Security Adviser - as close to the old guard that opposes many of the reforms proposed by Islam.
What to watch: Whether Islam, who has no official government position, accepts to become Head of Social Popular Leadership, potentially making him the country's second most prominent figure. Analysts say he turned the job down last year because it might still not give him the power he needs to push through reforms.
Business Opportunities: With oil money swelling Libya's coffers after years of austerity, foreign firms are jostling for billions of dollars of potential deals for housing, transport infrastructure, telecoms and public services. But the environment is fraught with dangers, from bureaucratic lethargy to a captive judiciary and risks tied to land ownership and changing business rules. Business-friendly reforms are going nowhere and Libya sits in 130th place out of 180 countries in Transparency International's 2009 Corruption Perceptions Index. Diplomatic hiccups can quickly have a devastating effect on companies operating in Libya.
Switzerland has failed to mend ties that broke down after the arrest of another son of Gaddafi, Hannibal, in Geneva in mid-2008. On March 3, Libya imposed a trade and economic embargo on Switzerland that effectively sounded a death knell for Swiss business interests in the desert country. Libya showed it was still ready to challenge its old foe the United States when it threatened U.S. oil companies with unnamed consequences in response to caustic comments about Gaddafi made by a Washington official. The official later apologized.
What to watch: Rising oil prices would give the government more money for its investment program. But they could also dull the incentive to make Libya more attractive for investors. Look for any signs that smaller companies are beginning to take the plunge and invest in Libya. So far it is viewed as the preserve of big multinationals that benefit from intense government lobbying and who are diversified enough to spread their risks.
Policy Vacuum: Gaddafi made up with the West to end a boycott that was running the economy into the sand, but has struggled to forge a new vision for Libya since sanctions ended in 2003. The country's state-run markets are now crammed with foreign consumer goods but a nebulous system of central economic planning and wealth distribution remains. Gaddafi still cherishes his vision of Islamic Socialism, with its system of grass-roots government by town-hall committees in which political parties are banned. Libya has no clearly defined economic policy. Gaddafi's promise to scrap corrupt government ministries and hand oil wealth to Libya's citizens remains unfulfilled.
Saif al-Islam has commissioned successive reform plans from Western consultancies but their free-market vision is being resisted by the powerful old guard that benefits from centralized provision of goods and services. Relations with the West are still prickly and the government has readily used Libya's growing economic clout to punish foreign states deemed to have slighted the Libyan leadership. Yet analysts say Gaddafi's foreign policy is dominated by pragmatism. Fearful of renewed isolation, he has improved ties with the U.S. and European Union while keeping good relations with Russia, China, Brazil and Iran.
Things to watch: Any sign that Saif al-Islam's reformist camp is losing influence. This might encourage the government of Prime Minister Al Baghdadi Ali al-Mahmoudi to take a more protectionist line on inward investment and tighten terms for foreign business. Also, unresolved differences with the West might boil over into more diplomatic stand-offs. Gaddafi has said Libya hoped for a bigger payback for the concessions it made to end sanctions and is resisting calls for more political openness and a freer press. Western leaders risk a political backlash for striking up chummy relations with Libya in the hope of winning lucrative business deals.
ENERGY SECTOR: Firms including Exxon Mobil, Occidental, BP and ENI are sinking billions of dollars into Libya for a share of Africa's biggest proven oil reserves. Foreign players accepted tight production shares when bidding for Libyan acreage and finds have proven disappointing so far, although a vast area remains to be explored. Experts say project approvals for drilling new acreage and enhanced oil recovery have been moving at a glacial pace.
When one firm - Canada's Verenex - announced a big find, Libya's government bought the company for less than its market price by force, a reminder of the risks run by smaller players.
What to watch: A new framework hydrocarbon law, Libya's first in more than 50 years, is being drafted and the government has not said whether it will alter conditions for foreign oil firms. National Oil Corporation Chairman Shokri Ghanem commands respect with foreign energy companies but his authority has been challenged by a new Supreme Council For Energy Affairs. The council is dominated by conservatives who may feel Ghanem is a soft touch for oil firms and call for more resource nationalism.
SOCIAL UNREST AND THE ISLAMIST THREAT: A lack of economic opportunities has led to occasional outbreaks of local unrest but the government keeps a tight grip on security. Opposition groups are weak and political activity outside the structure of the regime is virtually impossible. The population has grown fast and pressure for better living standards has risen after sanctions. With higher oil revenue, the state can distribute more wealth to buy popular support. The pardon and release from prison of hundreds of Islamist militants on March 23 shows the government is confident that it has neutralized the threat from the Libyan Islamic Fighting Group (LIFG) that once tried to assassinate Gaddafi.
What to watch: Any sign that LIFG splinter groups based abroad are attempting to revive the movement's activity within Libya or join with al Qaeda's Maghreb wing based in neighboring Algeria. (Reuters 01.04)
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11.7 MOROCCO: The Decentralization of Morocco's Monarchy
Yossef Ben-Meir wrote that in a speech on Nov. 6, 2009, King Mohammed VI of Morocco stated his intention to press ahead with decentralizing the kingdom, and that the "Saharan provinces" will be among the first regions to experience its benefits. The date marked the 34th anniversary of the Green March, when 350,000 unarmed Moroccans crossed into Spain's former Sahara colony, now internationally referred to as the Western Sahara, to reassert the kingdom's historic ties to the region. Since then, an ongoing territorial dispute has pitted the region's Polisario independence movement, backed with arms and financing by neighboring Algeria, against the central government in Rabat.
The Polisario Front was created in 1973 with the goal of ending the Spanish occupation of the Western Sahara. Following Spain's departure in 1975, the group shifted the focus of its efforts to opposing the subsequent annexation of the region by Morocco and Mauritania. In the same year, the Algerian government began providing the Polisario with support, while the International Court of Justice ruled that the people of the Western Sahara had the right to self-determination. Morocco's claims of historic ties to the Sahrawi (Arabic: Amazigh) tribes of the region are disputed by the Polisario Front, which maintains that the Western Sahara's indigenous inhabitants are historically distinct in terms of their experience and culture.
In 1979, the Polisario signed a peace treaty with Mauritania, which relinquished its claim to the Western Sahara. Morocco subsequently annexed the rest of the territory that Mauritania had vacated. Hostilities continued between Morocco and the Polisario until a ceasefire was negotiated in 1991. Population estimates of the region are also a point of disagreement and controversy, but total current inhabitants may be upwards of 400,000 people. This does not include Sahrawi refugees in the Tindouf camp inside the Algerian border, which the United Nations suggests could amount to approximately 90,000 people.
Any further progress toward resolving the conflict was stalemated by disagreements over who in the region should be allowed to vote in an independence referendum. Morocco's King Mohammed VI has since rejected the referendum option, most recently because of the autonomy proposal that the kingdom submitted to the United Nations in 2007.
Morocco's autonomy proposal to the United Nations calls for decentralizing authority to the people and institutions of the Western Sahara so that they may manage their own affairs, while remaining under Moroccan sovereignty. Extensive discussions are still required in order to determine the specifics of this proposed arrangement. Negotiations between the parties since 2007 have not produced a final status agreement, and a new round of negotiations, which would be the fifth, has not yet been scheduled.
Decentralization offers a potential means of conflict resolution by providing sub-regions with autonomy, responsibility and capacities to advance the empowerment of development, all of which can have a stabilizing effect. The guiding principle is that decentralization creates national unity, or at least greater levels of peace, by way of enabling increased levels of regional diversity and determination.
King Mohammed VI is mindful of this potential danger of decentralization, and he stated that the process of decentralization and the strengthening of national solidarity must go "hand in hand." This is one essential reason why the king called for a "gradual" decentralization process.
The way decentralization is implemented will decide if it generates the needed trust and ushers in a new period of lasting peace and greater prosperity. If it successfully resolves the Western Saharan conflict, decentralization would also remove the greatest obstacle preventing strong collaboration among the Maghreb Union - a regional bloc that includes Morocco, Mauritania, Algeria, Tunisia, and Libya. Virtually all nations of the world are part of regional blocs because of the wide range of economic opportunities they present (larger markets, greater economies of scale, lower prices and inflation, and increased efficiency and self-reliance), as well as the chance to cooperate on regional challenges such as pollution and immigration. A more viable and productive Union is clearly a highly important goal of Morocco's king, as he understands that it is an essential step toward becoming better competitive in a globalized environment.
In the context of the Western Sahara, it would be prudent to devolve government responsibilities as locally as possible because that will likely be perceived by the people of the region as a more heightened level of autonomy, which will in turn build further trust. It is also important that the people and institutions of the region become engaged with, and receive benefits from, decentralization as soon as possible so that they develop a stake in the system and therefore seek to maintain it.
The king often emphasizes utilizing the participatory method toward decentralization. The participatory approach involves direct engagement of the people in managing their own development and social affairs, instilling in them a sense of control and ownership of issues they deem important. In the Western Sahara, local people would see that the region's future depends on and reflects the decisions that they make.
Western Saharan public and private institutions should be identified that can be effective vehicles for transferring skills related to facilitating participatory development to its members. For example, members of indigenous civil associations dedicated to local development ought to be targeted to receive training. The more widely these essential skills are dispersed, the more likely development that meets the self-described needs of the people will occur and decentralization will have the chance to succeed.
Decentralization along the lines that Morocco's king enumerated will require reforming the Ministry of Interior, whose purpose is the internal security of the nation. First, as the registering agency, it can play a major role in the building of institutional partnerships by making available to the public, via the Internet, the contact information of the tens of thousands of nonprofit Moroccan associations, broken down by region and mission category. Second, protocols requiring notification of the Ministry of Interior of local community planning meetings and project implementation activities should be phased out. Finally, a review of ways the Ministry of Interior can use its network to assist local and regional development should be a high priority.
A decentralization agency as part of the palace administration would help build productive institutional partnerships, within government and among all sectors and levels. Observers have suggested that the king's greatest challenge is to guide the transition toward decentralization. An agency within the Royal Cabinet would create the strategic position for that purpose.
Morocco's successful decentralization could create historic opportunities for the nation and the region. By fulfilling the political, social, cultural, economic and environmental aspirations of its population, it could also result in the most viable conditions for ending the conflict of the Western Sahara to date.
Yossef Ben-Meir is a professor of sociology at Al Akhawayn University in Ifrane, Morocco. He is also president of the High Atlas Foundation, a non-government organization founded by former Peace Corps Volunteers and dedicated to advancing community development in Morocco. (HNN 05.04)
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11.8 MOROCCO: Ahead of the Rest
The arid Middle East and North Africa (MENA) region faces imminent water challenges due to climate change and demographic pressure, but some countries, such as Morocco, have begun the task of aggressively securing future water supplies. Over the past decade, the country has made long strides towards more efficient water usage in its agricultural sector and increased provision of drinking water and sanitation services to the rural poor.
The World Bank has estimated that the available water per person in the MENA region will be halved by 2050. Nonetheless, the financial institution announced in a March 2010 project update that Morocco was "on track to exceed the targets for water and sanitation services contained in the Millennium Development Goals", having increased "its "urban, peri-urban, and rural water supply and sanitation infrastructure programs spending" from 5% to 25% of total water expenditure between 2005 and 2009. As a result, access to potable water increased from 50% in 2004 to 87% in 2009.
Droughts have plagued the region in the past decade – according to Morocco's Secretariat of State in Charge of Water and Environment, the rainfall deficit has reached nearly 40% some years. "Morocco's water management strategies needed to adapt to meet a number of challenges: growing water deficits, persisting gaps in service access, slow changes in legislation, limited infrastructure programs, pressing demographic growth and climate change," wrote the World Bank.
In 2000, Morocco introduced a national water strategy and established several public agencies dedicated to water security, including the National Office of Potable Water (Office National de l'Eau Potable, ONEP), which now accounts for over 80% of drinking water production. ONEP has set aside €260m for increasing treatment capacity between 2008 and 2010. "Morocco has invested heavily in dams, water supply capacity and large-scale irrigation systems to secure water for urban and agricultural demands," the World Bank wrote. One ongoing ONEP initiative is to reinforce the drinking water production and supply systems in the towns of Khenifra, Taounate, Settat, Marrakech and Tamesna. Partially financed by the African Development Bank, the €84m project is due for completion in 2010.
Foreign aid has provided a substantial boost to Morocco's water security efforts. The International Bank for Reconstruction and Development, a financing arm of the World Bank, launched a €44.5m rural water supply program in 2005 and provided a €74.2m Morocco Water Sector Development Policy Loan in 2007.
USAID has initiated a number of water-themed pilot programs in recent years, including a chromium recycling factory to prevent tanneries from leaking the chemical into the Sebou River. In March 2010, the Japan International Cooperation Agency signed off on a €193.6m loan to Morocco, of which €126.8m will go to wastewater treatment and provision of drinking water.
Agriculture is Morocco's top water consumer, using around 80% of resources. Given that the sector is a major employer and a significant contributor to GDP, the 2008 national agriculture strategy, called the Green Morocco Plan (Plan Maroc Vert, PMV), implemented a number of practices to increase the stability and efficiency of water resources, including replacing existing irrigation systems with micro-irrigation. Under the PMV, drip irrigation will be expanded from 150,000 ha to 670,000 ha by 2020, and 1m ha of land dedicated to water-intensive cereal crops will be converted to less-intensive fruit and vegetable production.
Tourism development also threatened to take a bite out of scant water supply. MEDSTAT, a cooperation program between the EU and 10 Mediterranean partner countries, has predicted that tourism traffic in the Mediterranean will reach 396m per year by 2025, resulting in the mass construction of water-intensive hotels, golf courses and swimming pools. Nonetheless, the success of Morocco's water programs to date places it ahead of the pack in terms of resource security, and should serve as a regional model as nations begin to feel the heat. (OBG 08.04)
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11.9 PAKISTAN: Pharmaceuticals and Healthcare Report Q2 2010
Research and Markets' (http://www.researchandmarkets.com) "Pakistan Pharmaceuticals and Healthcare Report Q2 2010" said Pakistan's macroeconomic indicators have deteriorated significantly since Q110. The rupee has depreciated against the US dollar, GDP projections have been downgraded, inflation has increased and fiscal expenditure has contracted. Therefore, Pakistan's $1.61bn pharmaceutical market is now expected to post a 5-year compound annual growth rate of 8.95%, down from 9.39% forecast in the previous quarter.
BMI's Burden of Disease Database (BoDD) reveals that number of disability-adjusted life years (DALYs) lost to communicable diseases such as tuberculosis and measles in Pakistan during 2009 was 19,369,492. This is significantly more than the number of DALYs lost to non-communicable diseases (15,255,144). However, as the country's economy grows and life expectancy increases, this situation will reverse.
The pharmaceutical pricing regime in Pakistan is typical of an emerging market and far below international standards. Both generic drugs and patented products are subject to price controls. The maximum retail price (MRP) of a medicine is determined using a formula that incorporates manufacturing costs and retail markups. When pricing imported medicines, the cost of freight is also included.
In BMI's Asia Pacific Pharmaceutical Business Environment Ratings (BERs) for Q2/10, Pakistan has improved both its position and score. The country's rating has increased from 37.0 in Q1/10 to 40.0 in Q2/10, due to a positive re-assessment of the value and growth of its pharmaceutical market. As a result of this change, Pakistan has swapped positions with Bangladesh, which is now in 15th and last place. Pakistan's scores for Country structure, Market risk and Country risk are unchanged from the previous quarter. Demonstrating the unattractive nature of the market, Pakistan's component scores are all well below the regional averages.
Further evolution of the healthcare insurance sector was seen in November 2009, when the Aga Khan Agency for Microfinance (AKAM) established a healthcare insurance service in Pakistan. The First Microinsurance Agency (FMiA) offers three products in conjunction with an education program. Due to improved access to healthcare, there will be some commercial upside for private hospitals and manufacturers of affordable generic drugs. Healthcare spending in Pakistan is expected to increase from $2.76b in 2009 to $2.86b in 2010. Due to depreciation of the rupee, this equates to growth of 3.6% in US dollar terms and 13.5% in local currency. Spending on healthcare as a percentage of GDP is 1.73%, well below both the regional (5.12%) and global (7.14%) averages. (R&M 12.04)
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11.10 PAKISTAN: Oil and Gas Report Q2 2010
Research and Markets (http://www.researchandmarkets.com) latest Pakistan Oil & Gas Report forecasts that the country will account for just 1.45% of Asia Pacific regional oil demand by 2014, while providing 0.78% of its supply. Regional oil use of 21.40mn barrels per day (b/d) in 2001 reached an estimated 25.63mn b/d in 2009. It should average 26.13mn b/d in 2010, then rise to around 29.23mn b/d by 2014. Regional oil production was just under 8.41mn b/d in 2001, and averaged an estimated 8.46mn b/d in 2009. It is set to increase to 8.77mn b/d by 2014. Oil imports are growing rapidly, because demand growth is outstripping the pace of supply expansion. In 2001 the region was importing an average of 12.99mn b/d. This total rose to an estimated 17.17mn b/d in 2009 and is forecast to reach 20.46mn b/d by 2014. The principal importers will be China, Japan, India and South Korea. By 2014 the only net exporter will be Malaysia.
In terms of natural gas, in 2009 the region consumed an estimated 466bn cubic meters (bcm) and demand of 616bcm is targeted for 2014. Production of an estimated 383bcm in 2009 should reach 542bcm in 2014, but this implies net imports falling from around 83bcm to 74bcm. This is thanks to many Asian gas producers being major exporters. Pakistan's share of gas consumption in 2009 was an estimated 7.84%, while its share of production is put at 9.54%. By 2013, its share of gas consumption is forecast to be 7.16%, with the country accounting for 7.75% of supply.
For 2009 as a whole, we have assumed an average OPEC basket price of $60.70 per barrel (bbl), a 35.5% decline year-on-year (y-o-y). For 2010, we expect to see a significant oil price recovery to $83.00/bbl for the OPEC basket price, gaining further ground to $85.00 in 2011 and to $90.00/bbl in 2012 and beyond.
In 2010, the authors are forecasting global premium unleaded gasoline prices to average $97.00/bbl, up from $70.22/bbl in 2009. We are assuming an average global jet fuel price for 2010 of $97.58/bbl, compared with $70.63/bbl in 2009. For gasoil, the 2010 price estimate is for an average of $97.40/bbl, compared with $70.50/bbl in 2009. The 2010 naphtha price average, estimated at $81.58/bbl, compares with $59.07/bbl in 2009.
Pakistan's real GDP growth in 2009 is assumed to have been 2.0%, down from 4.1% in 2008. In 2010-2014, average annual growth is put at 2.9%. Several state-controlled oil and gas companies are in the throes of privatization, and already work with international oil companies (IOCs) in the upstream segment. We foresee oil and gas liquids production of no more than 68,000b/d by 2014, with the country able to pump an estimated 80,000b/d in 2010. Consumption beyond 2009 is forecast to increase by up to 3.5% per annum to 2014, implying demand of 423,000b/d by the end of the forecast period. The import requirement would therefore be approximately 355,000b/d by 2014. Gas demand is set to rise from an estimated 36.5bcm in 2009 to 44.1bcm by 2014, requiring imports of at least 2.1bcm.
Between 2009 and 2019, we are forecasting a decrease in Pakistan oil production of 33.33%, with crude volumes falling steadily to 50,000b/d in 2019. Oil consumption between 2009 and 2019 is set to increase by 30.49%, with growth slowing to an assumed 3.0% per annum towards the end of the period and the country using 485,000b/d by 2019. Gas production is expected to rise from an estimated 36.5bcm in 2009 to a possible 47.0bcm by 2019. With demand growth of 49.32%, this will require imports rising to 7.5bcm by the end of the forecast period. Details of the 10-year forecasts can be found later in this report, which provides regional and country-specific projections. Pakistan now ranks eighth, between the Philippines and Thailand, in the updated and expanded Upstream Business Environment Rating, reflecting a reasonable resource position, better-than-average output growth outlook and falling state involvement. (R&M 06.04)
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11.11 TURKEY: OTC Pharmaceutical Sales in Turkey Are Predicted to Increase
Research and Markets(http://www.researchandmarkets.com) "Turkey Retail Report Q2 2010" report predicts that the country's retail sales will more than double by 2014, from about $208bn in 2009 to more than $458bn. Underlying economic growth; an expanding population, especially in urban areas; rising levels of disposable income; and the continued development of organized retail infrastructure are key factors behind the forecast growth in Turkish retail sales. Turkeys nominal GDP was $607.1bn in 2009, with last years decline of 6.2% expected to translate into growth of 3.7% in 2010 as the economy begins to improve. Average annual GDP growth of 2.8% is now predicted by BMI between 2009 and 2014. With the population increasing from 72.2mn in 2009 to an estimated 76.6mn by 2014, GDP per capita is forecast to more than double to $17,262 by the end of the forecast period. The forecast for consumer spending per capita is for an increase from $5,015 in 2009 to $7,641 by 2014.
Salaries in Turkey remain low, with BMI estimating the 2007 average annual wage at $5,848. However, Turkey has a large, growing and young population. Each year, 750,000 young people join the workforce and with an increasing level of urbanization, many are abandoning the agricultural sector in order to seek better paid work in other areas. Nevertheless, unemployment is a problem, reaching an estimated 15.0% by the end of 2009. The author forecasts that this will start to fall in 2010, ending the forecast period at 8.0%.
In 2005, 65.8% of the Turkish population was described by the UN as economically active, with 44.1% in the 20-44 age range, which is important for retail sales. Just over two-thirds of the population was classified by the UN as urban (67.3%). By 2015, the urban population is forecast to have reached almost 72%, with 43.2% in the 20-44 age band, and 69.1% of the population is expected to be active. BMI has calculated that organized retail accounted for an estimated $84.72bn of overall sales in 2009, rising to a forecast $200.70bn by 2014, an annual average growth rate of 13.8%.
Using BMI Food & Drink service data the author identifies a food and drink retail market share in 2009 of 24.8%. Over the counter (OTC) pharmaceutical sales are predicted by BMI to increase from $1.04bn in 2009 to $2.01bn by 2014, a rise of over 93%. Automotive sales are forecast to rise by nearly 53% to $12.77bn by 2014. Sales of consumer electronics products are forecast to increase by nearly 67%, from $7.16bn in 2009 to $11.94bn by the end of the forecast period. (R&M 12.04)
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11.12 TURKEY: Nabucco Alternative Undercuts Potential Disruptions to EU Energy Supplies
Oilprice.com (http://www.Oilprice.com) reported that in late February 2010, Romania, Azerbaijan and Georgia finalized an agreement on the direct export of Azerbaijani natural gas to Romania. This has profound ramifications for halting Turkey's ability to hold the EU hostage to energy supplies via Turkey, and offers far more rapid easing of European energy pressures.
The new agreement calls for transporting the Azerbaijani gas via pipelines to the SOCAR-owned Kulevi terminal on the Georgian coast of the Black Sea. From there, the liquefied gas will be shipped across the Black Sea by tankers to new terminals in the Romanian port of Constanta. From Constanta, the gas will be distributed through the Romanian pipeline system. This agreement is aimed primarily at ameliorating Romania's near-total dependence on natural gas delivered by the pipeline from Russia via Ukraine. During the Winter of 2008/9, Romania suffered disproportionally as a result of the Ukrainian-Russian gas crisis, when Ukraine disrupted the flow of gas to Europe via Ukrainian territory in order to avoid paying its debt to Russia. Hence, it became imperative for Romania to diversify its sources of gas supplies in order not to be so vulnerable in future crises.
Moreover, given Romania's own economic crisis, Bucharest cannot afford to purchase and stores huge reserves, and therefore any disruption in ongoing gas supplies will have an immediate impact on Romanian customers. Hence the Romanian interest in, and commitment to, all previous alternatives to the pipelines via Ukraine. Romania is an active participant in the Nabucco pipeline project despite its growing problems and diminishing viability. As well, Romania has expressed a growing interest in the Russian South Stream pipeline, and, with the volatile Government of Bulgaria having growing problems with Russia over energy security issues, Romania is increasingly emerging as the entry point of the South Stream into the EU.
This approach is shared by the European Union's (EU's) Office of the Commissioner of Energy. In early 2010, the EU launched quick and profound changes such as a declared willingness to support South Stream. This policy change amounts to the EU virtually abandoning Nabucco, at least until a viable southern route, via Armenia rather than Georgia, is secured and the Azerbaijan-Turkey price dispute is resolved. In contrast with Nabucco, South Stream is a concrete project and in 2015, by the time it goes on line, its capacity will be four times the anticipated initial capacity of Nabucco, and twice the potential capacity if Nabucco is fully upgraded. Furthermore, Russia and Italy, the main stakeholders in South Stream, have expressed interest in integrating the inner-European gas transportation and supply system in order to achieve increased flexibility at a significant reduction of redundancy and thus cost.
Still, both pipelines - Nabucco and South Stream - are years away from completion. With Romania's vulnerability to the disruption of gas supplies via Ukraine painfully clear, Bucharest resolved to seek a quicker alternate source of natural gas and delivery, hence the just concluded agreement with Azerbaijan and Georgia. Although Bucharest signed the agreement in order to address Romania's own immediate energy problems, this agreement has the potential to become a major contribution to the overall long-term energy security of the EU.
The present agreement between Romania, Azerbaijan and Georgia covers the transportation of between seven- and 20-billion cubic meters of gas a year depending on Romania's own market needs. Initially, Nabucco is expected to transport 15-billion cubic meters a year, and, if the second-phase upgrade is implemented, Nabucco's maximal capacity will hit 31-billion cubic meters per year. If properly expanded, the Azerbaijan-Georgia-Romania route can thus become a viable replacement for the failing Nabucco: that is, a major source of natural gas transported into the EU outside Russian control. This factor - the diversification of suppliers and routes - has always been the sole purpose for Nabucco and the intense support it enjoys from the US. Since Azerbaijan was to be the primary source of natural gas for Nabucco, this project actually returns to the original alternate supplies as envisaged by the US.
Nabucco is presently an excellent engineering idea without any gas to transport. Because of the consortium's excessive demands for international guarantees that Russia does not attack the feeding pipeline on Georgian territory under any circumstance (Nabucco itself will start inside the Turkish territory), it is highly unlikely such a pipeline will be built or existing pipelines be converted to carry gas for Nabucco.
Simply put, not without reason, Russia refuses to have its military leverage and right to self-defense neutralized by, and held hostage to, the mere existence of the Nabucco feeder pipeline. The Kremlin has repeatedly declared that Russia has no interest in bombing pipelines on Georgian territory. Indeed, Russian forces refrained from bombing the pipelines and pumping stations during the August 2008 war. However, the Kremlin insists of reserving the right to bomb the hydrocarbon transportation infrastructure in Georgia as an instrument of deterring the volatile and unpredictable Tbilisi from instigating a new crisis.
In the absence of a negotiated solution to the Nagorno-Karabakh conflict respecting the territorial integrity of Azerbaijan, the prospects of a more viable southern-route feeder pipeline via the Arak River valley and Nakhichevan are virtually non-existent. Moreover, the long-term disagreements between Turkey and Azerbaijan over the pricing of the gas for Nabucco make the availability of Azerbaijani gas for Nabucco highly unlikely.
Originally, Azerbaijan was to be the prominent/primary source of gas for Nabucco, a point which was stressed by the Bush administration. The other potential substitute sources of gas for Nabucco are not viable. Iran (and Turkmenistan via Iran) is still hostage to the US-led sanctions, and in Iraq the energy infrastructure remains hostage to the escalating Arab-Kurdish-Turkoman disputes and sporadic fighting. Indeed, in August 2008, Kurdish terrorists blew up the natural gas line from Georgia, in eastern Turkey.
Official denials and protestations notwithstanding, Ankara is holding Nabucco as a hostage and instrument of pressure on the EU in order to expedite Turkey's accession to the EU without Turkey's meeting numerous preconditions (particularly judicial and human-right reforms and the question of Turkish military occupation of another EU country, Cyprus).
Since the major EU states are adamantly opposed to Turkey's joining the EU, a major crisis with Turkey is inevitable. It is inconceivable that, should Nabucco exist at that time, Turkey will not shut down Nabucco at a time of major crisis in order to pressure the EU into concessions. Both Ankara and Brussels are cognizant of this scenario, and Brussels is therefore adamant on preventing such EU vulnerability by reducing the EU's future use of Nabucco if it is ever constructed. In contrast, the new trans-Black Sea shipping route provides potential for a viable substitute to Nabucco.
The gas pipeline from Baku to the Kulevi Black Sea port can be covered by the current understandings between Azerbaijan and Russia because Azerbaijan owns the terminal facilities. Significantly, these understandings already withstood the August 2008 war. On the other side of the Black Sea, natural gas can be shipped from Constanta via existing pipelines into the original system envisioned for Nabucco, as well as be shipped by barges up the Danube and into Europe's canal-and-river system. A barge-based transportation system can go into operation far faster than pipeline construction, thus enhancing Europe's energy security and diversifying suppliers more rapidly than originally anticipated. Moreover, Azerbaijan is ready to commit the gas originally earmarked for Nabucco, and Turkmenistan is willing to reconsider support for and future export via a TCP.
The expansion of the Azerbaijan-Georgia-Romania natural gas transportation route meets the primary precondition which prompted the original US support for, and sponsorship of, Nabucco: namely, natural gas transportation system free of Russian control. At the same time, this route does not suffer from any of the debilitating shortcoming of the proposed Nabucco pipeline. Therefore, the Azerbaijan-Georgia-Romania route should be considered the viable, faster and cheaper alternative to Nabucco.
Analysis By Yossef Bodansky, Senior Editor, GIS/Defense & Foreign Affairs. (Oilprice.com 06.04)
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11.13 TURKEY: Power Struggle Escalates In Turkish Coup Plot Case
Fox News reports that a power struggle between Turkey's Islamic-rooted government and its fiercely secular military escalated on 6 April when a court formally charged a senior general with plotting to overthrow the civilian leadership. The former head of the country's National Security Council, Gen. Sukru Sariisik, joined dozens of serving and retired senior officers accused of conspiring to destabilize the government in a conspiracy dubbed Balyoz, or "the sledgehammer." The court also charged another retired general and a colonel.
Prosecutors have not made public any evidence or even details of the accusations since they were first made in January. But the national newspaper Taraf has published what it calls leaked copies of documents by the conspirators detailing their plans. Those include blowing up at least two major mosques during Friday prayers; assassinating some Christian and Jewish leaders; and shooting down a Turkish warplane and blaming it on Greece, the country's historic rival.
Taraf says the conspirators hoped the chaos would lead to calls for a military takeover, and even planned to turn stadiums into open-air prisons capable of holding tens of thousands of people if they challenged the troops. The paper says it has provided the documents to prosecutors, who are using them in their case.
Unable to independently assess the evidence, Turks remain divided on the authenticity of the plot and the threat it may have posed. What is clear, however, is that the balance of power in Turkey has tipped significantly in favor of civilian authorities, whose arrests of high-ranking military officers would have once been unimaginable.
The state-run Anatolia news agency said prosecutors went to the court on 6 April seeking charges against four officers including Sariisik, who emerged from a police minibus with tinted windows and walked into Istanbul's main courthouse without speaking to the press. The court released the fourth officer, a retired captain, without charges. Legal and military officials maintained their official silence regarding every aspect of the case.
The National Security Council was a powerful group of top military officials that exerted strong pressure on the government to follow a strictly secular line, including conducting close surveillance of radical Islamic movements. Prime Minister Erdogan's eight-year-old government has dramatically curbed its powers and turned into a merely advisory body on security affairs. Erdogan's business-friendly, Islamic-leaning government was elected on a platform that included permitting more open expression of faith, including a still-unmet promise to allow headscarves in schools. It also was forced to abandon an attempt to criminalize adultery.
The party has repeatedly denied that it is trying to impose religion on politics and society. But many senior military officials view it as a threat to the strictly secular state built by Mustafa Kemal Ataturk from the ashes of the Ottoman Empire in 1923, and ferociously defended by the army since then. The military has ousted four governments since 1960 in the name of secular principles.
Many had thought such instability was a thing of the past in Turkey, which has emerged from a deep economic crisis, begun taking steps to expand freedom of speech and repair its tainted human-rights record by granting more rights to minority Kurds in a bid to join the European Union.
Then, the discovery of a cache of weapons in the home of a retired military officer in 2007 led to an investigation into a purported coup plot by a gang of extremist secular nationalists called "Ergenekon," the name from a legendary valley in Central Asia believed to be the ancestral homeland of the Turkish people. The gang is suspected in attacks on a newspaper and a courthouse, and plots to kill the prime minister and Nobel laureate Orhan Pamuk. More than 400 people, including academics, journalists and politicians and soldiers, remain on trial.
Allegations of the "sledgehammer" plot emerged in January, when Taraf published what it called an intricately detailed leaked military plan to bomb Istanbul's Fatih and Bayazit mosques, even including the names and ranks of officers involved. About 40 retired and serving officers have been charged so far in the "sledgehammer" case. Some were also "Ergenekon" suspects.
Taraf also released what it described as the transcript of recordings of a March 2003 meeting at Istanbul's Selimiye barracks attended by more than 160 officers, including two dozen generals. Parts of the transcript have been published by other newspapers, and recordings released on several leading Web sites. A pro-Islamic newspaper, Yeni Safak, published a selection from that transcript quoting Sariisik as saying that "failure would lead to pacification of the Turkish Armed Forces and turned the Turkish Republic based on Ataturk's principles and revolutions into fanaticism of the Middle Ages." (Fox 06.04)
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11.14 GREECE: Fitch Downgrades Greece to 'BBB-'; Outlook Negative Ratings
On 09 April, Fitch Ratings (http://www.fitchratings.com) downgraded Greece's Long-term foreign and local currency Issuer Default Ratings to 'BBB-' from 'BBB+'. The Outlook is Negative. The agency has simultaneously affirmed Greece's Country Ceiling at 'AAA' and the Short-term foreign currency IDR at 'F2'.
The downgrade reflects the intensification of fiscal challenges in response to more adverse prospects for economic growth and increased interest costs. It also reflects ongoing uncertainties about the government's financing strategy in the context of increased capital market volatility.
The sharp rise in interest rates faced by the government this year, in combination with a deterioration in the outlook for economic growth, will make it harder for the government to achieve its fiscal targets of reducing the deficit to 8.7% of GDP this year and ensuring that public debt peaks at just over 120% of GDP in 2010 and 2011. Pressures on the banking system underline the adverse spill-over from sovereign risk concerns on the wider economy, while contingent liabilities from the banking sector will increase as the government provides banks with increased guaranteed funding.
Fitch recognizes some early indications of improvements in fiscal outturns and the strength of the government's commitment to fiscal consolidation measures, which have been supported by Greece's euro area peer governments. However, given that the credibility of the fiscal consolidation effort will only be established by sustained deficit reduction over a prolonged period of time, it is vital that the Greek authorities import credibility from external institutions, underpinned by a credible commitment of financial support. The agency reiterates the lack of clarity regarding the mechanism for timely external financial support may have hindered Greece's access to market finance at affordable cost and hence further undermined confidence in the capacity of the government to meet its fiscal targets. While Fitch judges that external financial support is likely to be forthcoming, greater clarity on back-stop financial support in the form of an explicit IMF program is likely to be required to shore up market confidence in the face of still substantial near-term financing needs.
The Negative Outlook reflects substantial uncertainties remaining over the prospects for sustained fiscal consolidation over the medium term. (Fitch Ratings 09.04)
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11.15 BULGARIA: Markets Keeping Capital
Bulgaria's capital markets have stabilized even as they face contagion risk from its debt-laden neighbor Greece. The country's economy is poised to make a slow but sure recovery from recession, according to senior banking officials and international agencies. Bulgarian central bank officials have moved quickly to quash suggestions, including those made in comments by Finance Minister Simeon Djankov in early arch, that the deepening Greek debt crisis could see a massive capital outflow from Bulgaria.
On March 1, Djankov said he was concerned over a potential flight of Greek capital from the local economy, adding he wanted reassurance from the Bulgarian National Bank (BNB) and the IMF that there was no risk to the development of the Bulgarian economy and business. With Greek banks owning some 30% of Bulgaria's banking sector and accounting for around 20% of credits and 30% of deposits, any rapid exit could exert real pressure on the country's capital markets.
Speaking at a seminar focusing on Bulgaria's capital markets in Sofia on March 8, BNB's deputy governor, Dimitar Kostov, said that to date there had been no serious impact on the country's finance sector from Greece's difficulties. To the contrary, there were indications that some companies were transferring capital in the other direction because foreign investors currently consider Bulgaria a low-risk destination, Kostov said. "For now capital is being transferred from Greece to Bulgaria, because currently Bulgaria offers a good level of stability," he said.
Similarly, BNB's governor, Ivan Iskrov, said there was no cause for concern regarding a sudden capital outflow from Bulgarian subsidiaries of Greek banks towards their main branches. "Every month the central bank carries out stress tests and monitors the banking system," Iskrov said on March 4. "There is nothing different for the Greek banks from a month ago. We are not doing checks on the Greek banks alone. We are monitoring all of the commercial banks. There are no reasons to worry."
Despite the reassurances from BNB officials, Djankov has not been alone in voicing concerns that the debt crisis in Greece could affect Bulgaria's capital markets and banking sector. In mid-February, Citigroup warned that Bulgaria was more susceptible to the risk of contagion from the Greek crisis than other neighboring countries such as Romania or Turkey. This was due to the high presence of Greek banks in the Bulgarian market, according to a Citibank report issued on February 11. "This, in turn, leaves the country more vulnerable to adverse shocks associated with Greek banks' funding," the report stated. However, while the risk was present, there had been no evidence that this sort of contagion was taking place, the report said. "We don't observe any signs of stress in the Bulgarian money markets so far," according to the Citigroup economists.
This lack of dislocation prompted the IMF to upgrade its growth forecast for Bulgaria at the beginning of March, predicting that GDP would expand by 0.2%, in contrast to the 2.5% contraction that the fund had projected earlier in the year and a marked turnaround from the 5.2% shrinkage experienced in 2009. Combined with this modest growth, the IMF has predicted that inflation will remain low, running at around 2.2%, while the current account deficit will narrow from 8.5% in 2009 to 5.5% of GDP in 2010.
To help sustain this expected growth, the government has announced it will continue to make use of the capital markets to fund some of its activity, planning to issue bonds worth some €373m in 2010. Of this, the Finance Ministry has said €75.5m would represent net financing, while the remaining €297.5m would be the maturing of bonds.
According to the Finance Ministry, the intention was to issue two- and four-year bonds and avoid the sale of three- and five-year securities. This would harmonize the maturity of such bonds with the redemption periods in 2013 and 2015 of global bonds held by Bulgaria, the ministry said.
Early indications are that the government should have no troubles in meeting its refinancing targets. There were offerings in the first three months of the year, all denominated in Euros, with the February issue for €24.6m worth of bonds being oversubscribed some three times. As long as external events to not conspire to drain funds out of the Bulgarian financial sector and the economy continues to move forward, there is a good chance that the country's capital markets should remain stable in the short to medium term. (OBG02.04)
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