• Answers.com Announces Successful Completion of Acquisition by AFCV Holdings
• Work Begins On Israel's Largest Private Power Station
• Lebanon First Quarter Car Sales Up 7.3%
• Canadian Firm in Saudi Drilling Services JV
• Three-Fold Israeli Victory Against Asbestos
• EU Approves New Trade Incentives for North Africa
• Bulgaria Has Highest Projected GDP Growth in EU10
• State of Economy Index Rises 0.5% in March
• TUNISIA: The Future of al-Nahda in Tunisia
  

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Government Approves Joining European Nuclear Organization
1.2 Bank of Israel Plans New Series of Coins

Back to Top

2: ISRAEL MARKET & BUSINESS NEWS

2.1 Answers.com Announces Successful Completion of Acquisition by AFCV Holdings
2.2 SITECH Technology Dealer Established in Israel for Heavy and Highway Contractors
2.3 Panoramic Power Announces $4.5 Million Funding
2.4 Israel Real Estate Report Q2 2011 Forecasts Real Growth at 3%
2.5 Work Begins On Israel's Largest Private Power Station
2.6 Israeli Mobile Startups Showcase Advanced Technologies in Silicon Valley
2.7 Alcatel Lucent Opens Global Cloud Unit in Israel

Back to Top

3: REGIONAL PRIVATE SECTOR NEWS

3.1 Brazil's Coffee Exports to Arab World Grows 44% in March
3.2 Lebanon First Quarter Car Sales Up 7.3%
3.3 Augusta Systems Software Aids Homeland Security in Jordan
3.4 Dubai Is Top Choice for International Retailers
3.5 Canadian Firm in Saudi Drilling Services JV
3.6 Saudi Market for Tires Worth $800 Million, Set for 12% Annual Growth
3.7 Turkey Selects Sikorsky Aircraft for 109 BLACK HAWK Helicopter Program
3.8 Bulgaria's New Car Market Starts To Improve in First Quarter

Back to Top

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Three-Fold Israeli Victory Against Asbestos
4.2 Better Place Begins Installing Hawaii's First Electric Car Charging Network
4.3 A Greek Wind Park
4.4 Bulgaria's New Renewable Energy Act Cools Down Investors' Hopes

Back to Top

5: ARAB STATE & PAKISTANI DEVELOPMENTS

5.1 Syria Unrest May Hurt Lebanon Economy
5.2 Lebanon Sees Decline in Tourist Numbers
5.3 GCC Hotel Room Revenues to Hit $22 Billion in 2012
5.4 Remittances from UAE See Annual Growth of 15% in First Quarter
5.5 UAE Ranked Most IT-Friendly Country in Arab MENA
5.6 Abu Dhabi's Yahsat's First Satellite Launched
5.7 Dubai Ranked 11th in 2020 Global Cities List
5.8 Saudi Arabia's Annual Inflation Slows To 4.7% in March 2011
5.9 Saudi Arabia & US Conclude Open Skies Deal
5.10 EU Approves New Trade Incentives for North Africa
5.11 Cairo Seeks Approval for E£10 Billion Increment To Subsidy Bill
5.12 Egypt Budget Deficit May Exceed 10% in 2011/12
5.13 Egyptian Government to Double Food Subsidies
5.14 Egypt Unrest Leads To Plunge in February Tourism Revenue
5.15 USAID's Egypt Program to Address Economic Development
5.16 Fitch Downgrades and Withdraws Libya's Ratings

Back to Top

6: TURKISH, CYPRIOT, GREEK & BULGARIAN DEVELOPMENTS

6.1 Cyprus' Harmonized Inflation Steady at 3.2% in March
6.2 Greece's Budget Gap Wider Than Estimated
6.3 Attica Hospitals to Be Merged in Money-Saving Scheme
6.4 Bulgaria's Annual Inflation Rate Reaches 5.6%
6.5 Bulgaria's Unemployment Rate Down to 9.5% in March 2011
6.6 Bulgaria Has Highest Projected GDP Growth in EU10
6.7 Bulgarian Government to Go For State Tourism Advertising Company
6.8 Bulgarian IT Sector Doubles Attracted EU Funds In 2010

Back to Top

7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Yom HaShoah - Holocaust Martyrs' & Heroes' Remembrance Day 2011
7.2 Israel Honors Fallen Soldiers With Jerusalem Service & National Siren
7.3 Israel's Independence Day – 63 Years Since Sovereignty Regained

*REGIONAL:

7.4 New Speed Limit Set To Start on Abu Dhabi-Dubai Road
7.5 Saudi Women Press For Right To Vote
7.6 Demolition Begins On Monument To Humanity In Eastern Turkey

Back to Top

8: ISRAEL LIFE SCIENCE NEWS

8.1 EarlySense Chose Massachusetts for U.S. HQ After Governor Patrick's Trade Mission
8.2 WFD Ventures Portfolio Company Gains FDA Approval for Novel Cancer Treatment
8.3 Taro Receives FDA Approval for Imiquimod Cream, 5%
8.4 ETView Medical & Stopler Belgium Execute Distribution Agreement
8.5 KAHR Medical Raising $3 Million for Novel Cancer Drug Development
8.6 BioControl Medical Launches INOVATE-HF IDE Study of CardioFit System

Back to Top

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Connect One's Mobile Hotspot Extended to Android and Blackberry
9.2 Ethernity Networks is Awarded a Key Patent on Ethernet MAC
9.3 ECI Telecom Partners to Supply Next-Generation Network Solutions in China
9.4 Gizmox Launches First .Net Development Tool for Cross-open Browser/Mobile Standards
9.5 Voxbone & Jajah Create Service That Localizes International Calling
9.6 IMI Develops Safety Mechanism for Hand Grenades
9.7 Mellanox Introduces SwitchX with Virtual Protocol Interconnect Technology
9.8 TowerJazz Announces Availability of Highest Speed Foundry SiGe Technology

Back to Top

10: ISRAEL ECONOMIC STATISTICS

10.1 Israel's CPI Rises By 0.2% in March
10.2 State of Economy Index Rises 0.5% in March
10.3 GDP Growth Continues at Healthy Rate
10.4 Israel's First Quarter Trade Deficit $4.3 Billion
10.5 Bank of Israel Report Says 60% of Poor Israelis Work
10.6 Industrial Production Continues to Rise
10.7 Masada Takes Over As Israel's Top Tourist Site

Back to Top

11: IN DEPTH

11.1 ISRAEL: Summary of Israeli High-Tech Company Capital Raising - Q1/11
11.2 JORDAN: Extending its Reach
11.3 JORDAN: Jordan Property Market Steady Despite Unrest
11.4 KUWAIT: Port Plans
11.5 QATAR: Developing Education
11.6 UAE: Abu Dhabi's Classroom Upgrade
11.7 SAUDI ARABIA: Focus on Food Security
11.8 EGYPT: Moody's: Negative Outlook for Egyptian Banking System
11.9 TUNISIA: Economy is a Hard Slog
11.10 TUNISIA: The Future of al-Nahda in Tunisia
11.11 OMAN: Smooth Sailing
11.12 TURKEY: Medical Tourism Expected to Record Strong Growth
11.13 GREECE: Infrastructure Report Q2 2011

Back to Top

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Government Approves Joining European Nuclear Organization

Israel is set to become the first non-European member of European Organization for Nuclear Research (CERN). CERN has created the world's most sophisticated, advanced and expensive scientific infrastructure particle accelerator for unlocking the secrets of the universe. After the government approved membership on 17 April, Prime Minister Benjamin Netanyahu said that joining CERN was a great scientific and diplomatic achievement for Israel. This achievement reflects the latent capabilities of Israeli scientists and constitutes recognition of their ability. Israel is joining an exclusive club, which provides unusual visibility, exposure, prestige and international status. (Globes 17.04)

Back to Table of Contents

1.2 Bank of Israel Plans New Series of Coins

The Bank of Israel is planning a new series of coins, 25 years after issuing the current series. The new coins will enter circulation within 2-3 years. The reasons for the new coins are to prevent forgery, reduce production costs and to refresh the currency after a generation. Current production costs of the 10 agorot and 50 agorot coins are almost equal to their nominal value. The new coins will have a completely different design from the current ones. No decision has yet been taken on the new designs, or how many coins will be issued. Most likely the same six denominations - 10 agorot, 50 agorot, NIS 1, NIS 2, NIS 5 and NIS 10 - will be issued under the new series. The Bank of Israel is also considering ending use of the term "New Israeli Shekel", and reverting to the previous name of "Shekel". The New Israeli Shekel replaced the shekel in 1985, lopping off three zeros, during Israel's era of hyperinflation. (Globes 21.04)

Back to Table of Contents

2.1 Answers.com Announces Successful Completion of Acquisition by AFCV Holdings

Answers.com announced that AFCV Holdings, a portfolio company of growth equity investor Summit Partners, has consummated the previously announced merger to acquire Answers.com. On 14 April, Answers.com's stockholders approved the merger at a special meeting of stockholders. Pursuant to the definitive merger agreement between Answers.com and AFCV Holdings, Answers.com common stockholders will receive $10.50 per share in cash, without interest and less any applicable withholding taxes, for each share of common stock they owned immediately prior to the effective time of the merger, other than shares owned by stockholders who have properly exercised appraisal rights. Answers.com's common stock ceased trading on The NASDAQ Capital Market at the close of market and was delisted.

Jerusalem's Answers Corporation (http://www.answers.com) owns and operates Answers.com, the leading Q&A site. Answers.com is a community-generated social knowledge Q&A platform, leveraging wiki-based technologies. Through the contributions of its large and growing community, answers are improved and updated over time. The award-winning Answers.com also includes content on millions of topics from over 250 licensed dictionaries and encyclopedias from leading publishers, including Houghton Mifflin, Barron's and Encyclopedia Britannica. The site supports English, French, Italian, German, Spanish, and Tagalog (Filipino). (Answers.com 14.04)

Back to Table of Contents

Sunnyvale, California's Trimble announced today that a SITECH Technology Dealer has been established in Israel. SITECH Israel joins the premier network of SITECH dealerships - the first fully dedicated global distribution network offering the most comprehensive portfolio of construction technology systems available to the heavy and highway contractor. SITECH Technology Dealers represent Trimble and Caterpillar machine control systems for the contractor's entire fleet of heavy equipment regardless of machine brand, along with Trimble's portfolio of Connected Site solutions - site positioning systems, construction asset management services, software and powerful wireless and Internet-based site communications infrastructure. Trimble is establishing a SITECH Technology Dealer network in the Americas, Europe and Asia / Pacific regions. SITECH Israel will serve heavy and highway contractors in Israel involved in a range of earthmoving applications such as the construction of roads, highways, railways and airports as well as site prep for large commercial, industrial and residential projects. SITECH Israel is now a part of the worldwide SITECH distribution network, which offers consultative advice on construction technology solutions, customized training, data services, installation, service and technical support. (Trimble 14.04)

Back to Table of Contents

2.3 Panoramic Power Announces $4.5 Million Funding

Panoramic Power, an early stage company developing a cloud-hosted, real-time energy monitoring platform and service announced today that it has raised $4.5 million in an investment round co-led by Israel Cleantech Ventures (ICV) and Greylock Partners. Clal Energy has also joined the round. Existing investors Qualcomm Ventures (via QPrize), the Israel Electric Company (Karat Program) and Alexander Schneider have participated as well. This round brings the total financial backing of the company to $6m. Kfar Saba's Panoramic Power (http://www.panpwr.com) provides an innovative Energy Management System (EMS) that enables enterprises and organizations to reduce their operational and energy expenses. They help customers improve their energy efficiency using a breakthrough power flow visibility platform. (Panoramic Power 14.04)

2.4 Israel Real Estate Report Q2 2011 Forecasts Real Growth at 3%

Research and Markets (http://www.researchandmarkets.com) "Israel Real Estate Report Q2 2011" says Israel's residential property market has attracted attention due to overheating. In November 2010 the IMF warned that house prices were rising unsustainably, to the extent that they posed a risk to Israel's banking sector. The government is now intervening in the market with initiatives to stimulate the construction of more housing stock in order try and balance supply with demand.

The commercial sector has been much more stable (and has therefore avoided any government intervention). Rental rates have been broadly stable between 2009 and 2010, with some exceptions. The market remains quite optimistic when looking at the next few years. Supply and demand are reasonably in balance with vacancy rates of less than 20% in office and retail space and barely 10% in industrial property. There are new projects to come on stream but not in sufficient quantity to disturb the broadly balanced position of the market.

On the economy, Israel's rate of GDP growth for Q3/10 was 3.8%. The author expects growth to moderate even more through 2011 and 2012. Compared to Q2/10, every component of GDP by expenditure posted a lower rate of growth, except for government spending. The author believes that the anemic recovery in Western economies bodes poorly for both consumption and exports, which were two key growth drivers throughout 2010. While our end-2010 real GDP growth estimate has been revised upward to 3.7%, our 2011 and 2012 real growth forecasts are 3% respectively, due to Israel's muted growth prospects over the medium term. (R&M 18.04)

Back to Table of Contents

2.5 Work Begins On Largest Private Power Station

Scotland-based Wood Group has begun construction of Israel's largest private power station that Dorad Energy is establishing on land owned by Eilat Ashkelon Pipeline Company (EAPC) in Ashkelon. The $870 million project is Wood Group's first activity in Israel. Wood Group will carry out the earthworks, frame, construction and electrical work for the power station. Wood Group GTS, the company's gas turbine services unit, will install the natural gas turbines, which are scheduled to arrive in Israel by the end of the year. The power station will have 12 General Electric gas turbines and two steam turbines. The company will employee 300 people - mostly Israelis - on the project and the number of employees will peak at 1,000 during the height of construction. Dorad shareholder Uri Dori Engineering Works Corp. is the subcontractor for the earthworks. Wood Group said that the power station will be completed in 2013. (Globes 21.04)

Back to Table of Contents

2.6 Israeli Mobile Startups Showcase Advanced Technologies in Silicon Valley

The California Israel Chamber of Commerce (CICC) announced 15 Israeli innovative mobile startups have been chosen to participate in a delegation to meet with industry leaders, investment firms, technology giants and partners from 3 – 5 May in Silicon Valley, California. The 3-day Israel Mobile Tour (http://www.israelmobiletour.org) is designed to offer entrepreneurs a unique platform to advance and accelerate their startups and will include targeted visits in companies such as Google, Facebook, Apple, Microsoft and AT&T. Visiting entrepreneurs will engage with Silicon Valley's leading mobile startups disrupting the industry and demo to local angels and Venture Capital investors. A highlight of the program is The Israel Mobile Showcase, scheduled for May 5, featuring the latest innovative mobile solutions from Israel. Tickets are available at: http://ciccisraelmobiletour.eventbrite.com. The innovative mobile companies selected to participate include: CellSec, Digimo, DudaMobile, Exent, FellowUp, Fooducate, Innobell, MoMinis, Onavo, Perfecto Mobile, Rewardy, Ringbow, TekTrak, Zipory and ZooZ. (CICC 25.04)

Back to Table of Contents

2.7 Alcatel Lucent Opens Global Cloud Unit in Israel

On 26 April, Alcatel Lucent officially launched its global cloud computing center in Israel, keeping its promise made when it recently closed its optics R&D center and fired scores of employees. The new business unit will include an R&D center that will focus on developing cloud-based smart, open and secure architectures for communications carriers worldwide. Alcatel Lucent said the decision to open the cloud unit in Israel was made after a thorough examination of several alternative sites in the world. The reasons include Israel's high-quality personnel and software engineers, its entrepreneurial spirit and existing cloud concentration. The new unit in Israel will operate as an internal start-up in terms of speed, flexibility and rapid decision-making. It will have scores of employees by the end of 2011. The decision to set up the center in Israel was related to the fact that the country has a critical mass of people with the understanding and capabilities in IT and telecommunications. (Globes 26.4)

Back to Table of Contents

3: REGIONAL PRIVATE SECTOR NEWS

3.1 Brazil's Coffee Exports to Arab World Grows 44% in March

Coffee exports from Brazil to Arab countries generated more than $20m in March, a growth of 44% over the same month last year. According to figures from the Brazilian Coffee Exporter Council (Cecafe), shipments totaled 109,700 60kg bags of coffee, 5% higher. The big increase in revenues, as against the modest rise in volume exported, was a result of higher prices on the international market. The main markets in the Arab world, according to the Cecafe, were Lebanon, Syria, Saudi Arabia and Tunisia. In the accumulated result for the first quarter, sales to the region generated $58.9m, 36% more than in Q1/10. Shipments reached 351,000 bags, 7% higher. (AB 17.4)

Back to Table of Contents

3.2 Lebanon First Quarter car sales up 7.3%

Lebanese sales of new cars in the first quarter of 2011 increased by 7.3% from 6,039 to 6,483 compared with the same period last year – with Korean cars leading the way in sales, the most popular models being Kia and Hyundai. According to the New Car Importers Association in Lebanon, March sales in 2011 alone were 2,687, compared with 2,497 in the same period of 2010, an increase of 7.6%. First-quarter figures show that Korean cars are still a bestseller in Lebanon, with 2,803 cars sold, a rise in demand of 54.69%. This is followed by Japanese cars with 2,059 sales, a decline of 21.95%. Demand for European cars has fallen by 10.3%, with 1,629 sold this quarter compared with 1,816 new cars in the same period last year. Toyota came in third place with 908 sales. (TDS 25.04)

Back to Table of Contents

Morgantown, West Virginia's Augusta Systems' EdgeFrontier middleware has been deployed in a major homeland security initiative in Jordan. Used in conjunction with Intergraph's incident management software for public safety and security, EdgeFrontier assists the kingdom in preventing and responding to local and regional security emergencies and threats, including terrorism. The homeland security initiative supports police, fire and emergency response agency operations throughout the 648-square mile capital city of Amman and in surrounding cities including Zarqa and Madaba, providing seamless, coordinated response during multi-agency and multi-incident emergencies. Working with Intergraph's software, EdgeFrontier provides a platform for tying together diverse security and emergency response systems through integration and normalization of data, events and control functions. (Augusta Systems26.04)

Back to Table of Contents

Dubai is now the most sought after location for expansion for international big name retailers, alongside London, real estate analysts CB Richard Ellis announced. CBRE's annual survey - which mapped the global footprint of 323 of the world's top retailers across 73 countries - found that Middle East markets were attracting an increasing number of big name retailers and are competing with established global retail centers. It said Dubai now shared the top position with London as the most targeted retail destination. Kuwait City and Riyadh also maintained key positions in the top 20 ahead of many established destinations.

The UAE placed second to the UK as the most highly penetrated global market, attracting 54% of all international retail brands surveyed. The UK maintained its position as the world's most international retail market for the fourth year running with 58%, while the US made up the final position in the top three with 50%. Other Middle East countries faring well in the study were Saudi Arabia (11th), Kuwait (14th), Bahrain (29th) and Qatar (=30th). With 1.2 million square meters of retail space having come on to the market since 2006, a wealthy consumer base, and very little competition from local retailers, Dubai's stature as a key destination for international retailers has grown quickly.

A further trend has been an influx of US-based retailers in the last 18 months. Traditionally US retailers have been reluctant to adopt the retail franchise model that is commonly used in the Middle East; however, with limited opportunities for growth in their own markets, more retailers have taken the plunge and made inroads into the region, typically using Dubai as a springboard into the region's other markets. Following the large number of new entrants in 2009, the UAE fell back slightly in 2010 in terms of new store openings. However, this was relative to the high proportion of retailers already present in Dubai and retailers remain active in the region, with Kuwait (six new entrants) and Saudi Arabia (five) proving popular. Dubai was the top target for Asian retailers targeting markets outside their home region (22.9%) and was second only to London as the top target for American retailers. (AB 11.04)

Back to Table of Contents

3.5 Canadian Firm in Saudi Drilling Services JV

Canada-based oilfield services provider Strata Energy Services said it has entered into a joint venture agreement with Shoaibi Group to provide integrated performance drilling services in Saudi Arabia and its territorial waters. The new JV company, Strata Energy Services Saudi Arabia Limited (Sessal), to be headquartered in Al Khobar, Saudi Arabia, will offer fully integrated oilfield services with a special focus on underbalanced drilling and managed pressure drilling. The Saudi venture will also offer the complete line of patented rotating flow diverters (RFD) for all drilling applications, surface recovery and separation, light snubbing services, well design and project management as well as any additional equipment required to perform the same, said a statement from Strata Energy Services. (TradeArabia 26.04)

Back to Table of Contents

3.6 Saudi Market for Tires Worth $800 Million, Set for 12% Annual Growth

With more than 13m tires being imported annually and a market that is set to grow by 12 % each year*, Saudi Arabia is the largest market for tires and tubes in the Middle East region. This growth, fuelled by an economy riding on high oil prices, high disposable incomes and an unflagging appetite for all things automobile, means that the Kingdom is firmly in the sights of tire and tube manufacturers worldwide. According to industry figures, the Saudi Arabian import bill for tires is worth approximately $800m. This includes automotive tires for light vehicles such as passenger cars, pick-ups, SUVs and LCVs; tires for trucks and commercial vehicles; and aircraft tires. With millions of vehicles on the road, the prospects for future growth, both in the Kingdom and the wider region, is bright, as car ownership is on the increase. There are over 60 international brands already present in the Saudi market. All tires imported into Saudi Arabia have to pass the stringent safety specifications laid down by the Saudi Arabian Standards Organization (SASO – http://www.saso.org.sa), before they can be marketed in the Kingdom. (BI-ME 20.04)

Back to Table of Contents

3.7 Turkey Selects Sikorsky Aircraft for 109 BLACK HAWK Helicopter Program

Sikorsky Aircraft Corp. announced that the Defense Industry Executive Committee (DIEC) has selected Sikorsky for a contract involving 109 derivative BLACK HAWK helicopters for multi-mission use by the Turkish Government. Sikorsky will finalize contract details with the Undersecretariat for Defense Industry (known in Turkey as SSM) and Turkish Aerospace Industries (TAI). The aircraft will be assembled in Turkey by TAI as the prime contractor and will include components supplied by Sikorsky and other American and Turkish companies. The DIEC has reported the total program value to TAI at $3.5 billion, inclusive of work to be performed by Sikorsky and other program partners. As part of its contract proposal, Sikorsky will invest in expanding the dynamic components manufacturing capability of Alp Aviation, which is 50% owned by Sikorsky. Additionally, the industrialization proposal will allow Turkish industry access to the Sikorsky global supply chain including sale of Turkish assembled aircraft to future Sikorsky international customers. The DIEC has estimated that the export potential coupled with future Turkish indigenous requirements could reach 600 helicopters. The expected 10-year contract also would call for aftermarket support, including training and maintenance, leveraging Sikorsky's and Turkey's existing maintenance infrastructure to provide service and to supply parts and components to customers worldwide. (Sikorsky Aircraft Corp.26.04)

Back to Table of Contents

3.8 Bulgaria's New Car Market Starts To Improve in First Quarter

The market of new cars in Bulgaria has registered a modest but nonetheless tangible year-on-year growth in the first quarter of 2011. A total of 4,638 new cars were sold in Bulgaria in January-March 2011 vs. 3,956 sales in the same period of 2010, a growth of 17%, according to data of the Association of Car Importers. In March, a total of 1,816 new cars were sold, compared to 1,358 in February and 1,464 in January. Bulgaria's all time record first quarter in terms of new car sales was in 2008 when a total of 15 224 new cars were sold in the country, just months before the economy got into a depression and the market collapsed. The total number of vehicles, including cars, trucks, buses, and motorcycles, sold in the first quarter of the year is 4,888 vs. 4,116 in Q1/10. The most popular brand in Q1/11 in Bulgaria was Volkswagen with 567 new car sales, followed by Toyota with 427 sold vehicles. Ford is third with 414 sales, Peugeot comes in fourth with 369 sales, followed by Dacia with 357 and Skoda with 302. Mercedes is the leader in the sales of new buses and trucks – a total of 45 in the first quarter. Peugeot has the lead in the sales of new motorcycles – 42, or 67% of all motorcycles sold in Bulgaria in this period. (SMN 13.04)

Back to Table of Contents

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Three-Fold Israeli Victory Against Asbestos

During one week in March, three victories were notched up in the struggle to rid Israel of asbestos hazards: a new law was passed to end use of asbestos, the program to clean-up asbestos waste, and we wound up our long-running court case that triggered both of these important steps. Israel have been plagued for years by the presence of the carcinogen asbestos in many buildings and by the widespread use of dangerous friable asbestos waste in roads, sidewalks and other infrastructure throughout the Western Galilee and Nahariya in particular. The Israel Union for Environmental Defense (IUED - http://www.adamteva.org.il) has worked to rid Israel of asbestos for nearly a decade. In 2008, IUED and its community partner, the Association for Quality of Life & Environment in Nahariya (AQLEN), filed a lawsuit that led the Ministry for Environmental Protection to set up a new coordinating authority to implement a cleanup of asbestos waste in Nahariya. IUED's intervention also spurred the Ministry to draft the Prevention of Asbestos Hazards bill which was approved in March 2011.

IUED and AQLEN filed in the Haifa Administrative Court against the Ministry for Environmental Protection and the City of Nahariya, after the Nahariya municipality refused a Treasury grant of several million shekels designated for clean-up of asbestos waste throughout the town. The mayor refused the funds because he felt that responsibility for asbestos clean-up should be on the government. IUED's lawsuit was the main trigger that forced the Environment Ministry to set up an asbestos authority and to draft the law that includes a significant fund for clean-up. (IUED 14.03)

Back to Table of Contents

4.2 Better Place Begins Installing Hawaii's First Electric Car Charging Network

On 19 April, Better Place announced the initial deployment of its electric car network infrastructure in Hawaii. The installation of the first 10 charge spots across Oahu – five at the Sheraton Waikiki and five at three Hawaiian Electric sites – is the result of cross-sector partnerships between Better Place, Kyo-ya Hotels & Resorts, Starwood Hotels & Resorts Waikiki, Hawaiian Electric Company and the Hawaii Renewable Energy Development Venture. The project includes seven electric cars. Kyo-ya will operate two of them and Hawaiian Electric will own five of the cars. The cost of this pilot project is approximately $1.1 million, of which about $500,000 in funding was provided through the U.S. Department of Energy. Kyo-ya is the first in Hawaii's visitor industry to participate in this electric car charging network and will use the electric cars as fleet vehicles and shuttles to transport VIP guests between the airport and its four Waikiki hotels.

Israel's Better Place (http://www.betterplace.com), the world's leading electric car services provider, is accelerating the global transition to sustainable transportation. Better Place is building the infrastructure and intelligent network to deliver a range of services to drivers, enable widespread adoption of electric cars, and optimize energy use. The Better Place network addresses historical limitations to adoption by providing unlimited driving range in a convenient and accessible manner. (Better Place 19.04)

Back to Table of Contents

WRE Hellas, a pioneer in the Greek RES market, has just launched its third wind park in Greece, on the island of Kos. Green energy or green tech are the keywords of today and many see green energy as one of the potential saviors of the Greek economy. WRE Hellas, which started developing renewable energy projects many years ago, was founded by European Solar Prize laureate Victoria Alexandratou. In its 14th year of operation WRE Hellas is one of the oldest companies in its business and possesses a vast know-how and knowledge of the Greek renewable energies market. The WRE group focuses on the development of wind and photovoltaic parks. With projects of approximately 100mW in different phases of the licensing procedure the company will steadily increase its market share within the next five years. Past infrastructure problems and an unnecessary bureaucracy are recognized by the government, which is committed to administrative reform as well as a number of new legislative efforts to simplify the authorization procedure and to provide attractive incentives to investors. Five ENERCON wind energy converters are expected to provide an annual energy production of up to 14,000,000 kWh, which equals the electric energy need of approximately 3,000 four-person households. The wind turbines were delivered in August 2010 by ENERCON's brand new E-Ship 1. (Hellas April 2011)

Back to Table of Contents

4.4 Bulgaria's New Renewable Energy Act Cools Down Investors' Hopes

Bulgaria's Parliament has adopted a controversial draft of the long-anticipated Renewable Energy Act that seems to be designed to reign in the staggering growth of solar and wind energy projects. Until now, the state was obliged to purchase electricity produced from renewable energy generators at high, fixed prices, which has led to a jump in declared investments totaling over 6,000 – a capacity surpassing that of the national grid. According to the new law, long-termed fixed prices of electricity from renewable energy will be enjoyed only by those investors who manage to get a portion of the annual quotas for installing new production capacities using wind, solar, biomass and geothermal energy sources. Any investor which is left out of the quotas will have to forgo getting preferential prices for their renewable energy from the government. The installation quotas for renewable energy sources themselves will be determined by the State Commission for Energy and Water Regulation (DKEVR) each year by the end of June.

The GERB party government says Bulgaria only needs to 2,000 MW of renewable energy capacities to meet the 16% green energy target. In 2010, Bulgaria's total solar energy capacity reached 10 MW from 1.4 MW in 2008, and the installed wind energy capacity grew from 103 MW to 336 MW. According to the new RE Act, electricity produced from biomass, solar and geothermal energy will be bought out by the state with 20-year contracts, while wind energy will be subject to 12-year contracts. Energy from hydropower plants with capacities below 10 MW will be bought through 15 year contracts. An array of private investors and business associations have already expressed their disappointment with the provisions of the new Renewable Energy Act saying it is aimed at closing the market for many new investments. (SMN 21.04)

Back to Table of Contents

5: ARAB STATE & PAKISTANI DEVELOPMENTS

5.1 Syria Unrest May Hurt Lebanon Economy

Sustained political crisis in Syria will produce "terrible" repercussions on the Lebanese economy, economists told The Daily Star on 25 April. Deeply intertwined economic relations between Syria and Lebanon, as well as Syria's critical location as the only country with which Lebanon shares an open border causes the local economy to become extremely sensitive to political and economic turbulence in Syria. Lebanon's balance of trade account with Syria stands at $1.6b. Exports that transit through Syria are valued at $240m per year. The Lebanese economy relies mostly on what comes in and out of Syria. More than 30% of Lebanon's exports are transported by land, meaning that they must enter Syria in order to be able to arrive in foreign markets. Arab, Turkish and East European exports are all land exports.

Lebanese industrialists are especially concerned with the prospect of the Jordan-Syria border crossing closing down. That border crossing is one the most frequently used routes by exporters of Lebanon's goods. Activity at the crossing has been erratic in recent weeks, causing delays in trade. Tourism will be kept in check because a large portion of international travels visit Lebanon as part of a regional package deal, and with Syria now off-limits to many, Lebanon can expect to see many cancellations in hotel bookings.

In spite of the strain that has characterized political ties since the assassination of former Prime Minister Hariri in February 2005, economic relations between the two countries have prospered. Bilateral investment has almost doubled, with six Lebanese banks having opened in Syria in the last six years. Syria has liberalized its economy since 2005, restructuring its economies so that there is a greater emphasis on the service sector. (The Daily Star 26.04)

Back to Table of Contents

5.2 Lebanon Sees Decline in Tourist Numbers

Rafik Hariri International Airport saw a 13.36% drop in arrivals during the first quarter of 2011 as compared to the first quarter of last year. The decrease in traveler traffic follows region-wide trends which saw a rapid drop in tourism following the Arab revolts. Cancellations rates for tourism packages neared 50% in Jordan and 40% in Syria. The decline in passenger inflows was in large part due to a significant fall in the number of arrivals from other Arab countries. This March, the number of non-Lebanese Arab arrivals fell by 29.64% from March of last year. The largest group of foreign arrivals at Beirut airport during the first quarter has been non-Arab Asians, namely Iranians, who made up 80% of those arrivals. Iranians celebrated the Persian New Year, Nowruz, last month, which likely accounted for the heightened traffic. Arabs were the second largest group of foreign arrivals, with Jordanians making up the largest percentage of those passengers at 31%. Iraqis and Saudi Arabians ranked second and third, respectively. Europeans were the third largest group of foreign travelers, with the French the biggest European group to arrive in Beirut. (The Daily Star 14.04)

Back to Table of Contents

Hotel room revenues in the GCC hospitality sector are set to hit $22b in 2012, rising to $27b by 2015, Alpen Capital (ME) said on 13 April. The investment bank's new report said revenues would grow at a rate of 11% from 2010, with Saudi Arabia and UAE the two biggest markets in the region - with 89% share between them. Alpen Capital said it saw revenue per available room (RevPAR) in the GCC stabilizing at around $173 during 2012 to 2015. Average daily rate (ADR) for the region is expected to firm up to $257, the report said, while occupancy rates will be around 67% for the same period. The report added that in terms of the hotel rooms supply pipeline, Saudi Arabia led the way with 61% of the total pipeline, followed by UAE with 29%. The growing importance of sports tourism with the likes of the Dubai Desert Classic, Formula 1 in Abu Dhabi and Bahrain as well as Qatar winning the bid to host the 2022 World Cup will also have a positive impact on the industry. Challenges facing the hotel industry would include the wave of political unrest across parts of the GCC region as well as the larger MENA region, it said, adding that an oversupply of hotel rooms might also have a negative effect. (AB 13.04)

Back to Table of Contents

5.4 Remittances from UAE See Annual Growth of 15% in First Quarter

Remittances out of UAE money transfer exchanges have seen an annual increase of 10 - 15% during Q1/11 reaching nearly AED10 billion per month, according to the UAE's Foreign Exchange & Remittance Group (FERG). The FERG represents money-transfer companies in the UAE. The Indian subcontinent and the Philippines absorbed the bulk of outward remittances, being the biggest traditional destination of foreign transfers from the UAE. Flows to countries afflicted by unrest had also picked up, particularly to Egypt, as well as to Morocco, Syria and Jordan. Money-transfer bureaus represent an important channel through which expatriate labor (both unskilled and skilled) in the UAE remit their savings and income back home and this data further implies that economic activity in the UAE continues to rebound from the troughs reached during the financial crisis which had seen a deceleration in economic activity, and a large degree of job losses, which together affected the level of outward remittances from the UAE. This also further re-iterates our view that inward remittances to Egypt, which is a key source of foreign currency receipts to the economy generating around $9.5 billion (4.4% of GDP) in FY09/10, are likely to hold firm, since they are more linked to the outlook of the GCC region, during the current fiscal year as the political turmoil had hit tourism. It is expected that workers' remittances to Egypt would rise to $9.9 billion by end FY10/11. (Beltone 13.04)

Back to Table of Contents

5.5 UAE Ranked Most IT-Friendly Country in Arab MENA

The UAE retained its position as the Arab Middle East's most IT-friendly country in a global list published by the World Economic Forum. The Global Information Technology Report 2010-2011 ranked 138 economies by examining the correlation between ICT readiness and economic growth. In the Networked Readiness Index (NRI), the UAE was ranked 24th globally and second in the Middle East and North Africa region (after Israel, who was ranked 22nd). High mobile phone use, the availability of the latest technologies and government endorsement of the IT sector were drivers of the UAE's performance although the country slipped one place compared to last year's list. The UAE was closely followed by Qatar (25), with Bahrain (30), Saudi Arabia (33) and Oman (41) all included inside the top 50. Kuwait was the least technologically ready Arabian Gulf state, with a ranking of 75th. The Global Information Technology Report 2010-2011 is the tenth annual report produced in collaboration between INSEAD, the international business school and The World Economic Forum. (AB 13.04)

Back to Table of Contents

5.6 Abu Dhabi's Yahsat's First Satellite Launched

A communications satellite from Yahsat, a wholly-owned subsidiary of Abu Dhabi-based Mubadala Development Company, was launched from the European Space Center in Kourou, French Guiana. The Ariane 5 rocket carrying the spacecraft lifted off at 1:37am (Abu Dhabi Time) on 16 April. The Y1A will undertake a series of maneuvers before arriving at its final point of operation, 52.5 degrees east, above the UAE. After arriving in position, control of the satellite will be managed by a team of UAE-national satellite engineers based out of the Yahsat control station in Al Falah, Abu Dhabi. Yahsat has commissioned two satellites to create regionally-focused capacity to manage the expanding requirements for government, commercial and consumer satellite communication services. The second satellite, Y1B, is scheduled to launch at the end of 2011. (TradeArabia 23.04)

Back to Table of Contents

5.7 Dubai Ranked 11th in 2020 Global Cities List

Dubai is expected to move up the list of most influential global cities by 2020 but New York and London will remain on top, Knight Frank has said in a new report. Following a tough past 18 months in which key conglomerate Dubai World had to restructure debts of nearly $25b and house prices have dropped by up to 50%, the city has fallen to 32nd in Knight Frank's Global Cities Index for 2011. The rankings, based on economic activity, political power, quality of life and knowledge and influence, showed Dubai had fallen one place compared to the previous year. A total of 40 cities were assessed in the report. But in its predicted rankings for 2020, which form part of Knight Frank's Wealth Report 2011, Dubai will jump to 11th in the global table. The Wealth Report also measured the 2010 real estate performance of 85 cities within the 40 countries assessed in the global cities list. It showed prices in Dubai were down 10%, giving the emirate a ranking of 82nd. Abu Dhabi, with a price drop of 2%, was 58th in the list. (AB 14.04)

Back to Table of Contents

5.8 Saudi Arabia's Annual Inflation Slows To 4.7% in March 2011

Saudi Arabia's annual inflation slows to 4.7% y-o-y in March 2011, data on the Central Department of Statistics showed. This is the seventh consecutive deceleration in inflation y-o-y, whereby annual inflation had peaked in August 2010 to 6.1%. The deceleration in annual inflation has been mainly driven by slowing annual food inflation, which has been decelerating for the past 4 months. Pundits feel that the slowdown in inflation is temporary. Saudi Arabia's broad money supply (M3) stood at SAR1,096.7 billion in February 2011, growing by 8.6% y-o-y and by 0.9% m-o-m. The y-o-y growth in M3 has been accelerating for the past five months on the back of an annual growth in demand deposits, growing at an average of 22.6% y-o-y during the past 5 months. Therefore, it is expected to see growth in money supply accelerate further in 2011, as the two aid packages (exceeding $100 billion and targeting infrastructure and construction development, as well as, improvement in social welfare) materialize. The expected increase in money supply should put a pressure on inflation, going forward. (Beltone 14.04)

Back to Table of Contents

5.9 Saudi Arabia & US Conclude Open Skies Deal

The United States and Saudi Arabia initialed an ‘open skies' aviation deal easing restrictions tape on air travel between the two countries. The Saudi kingdom is the last of the six GCC member states to sign the air travel agreement with the US. Open skies deals curb government interference in the commercial decisions of air carriers about routes, capacity and pricing and can vastly expand international and cargo traffic. The United States has open skies deals with more than 100 foreign partners, including Saudi's Arab Gulf neighbors and Jordan. (AB 20.04)

Back to Table of Contents

5.10 EU Approves New Trade Incentives for North Africa

Exporters in North Africa, the Middle East and the Balkans will be able to sell goods to the European Union at lower tariffs more easily in future, under an agreement endorsed by the 27-nation bloc on 14 April. The agreement on preferential "rules of origin", approved by EU ministers, allows exporting states to source raw materials from countries such as China, and still qualify for low duties when shipping finished goods to Europe. The agreement covers seven Balkan countries and nine North African and Middle Eastern states -- Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Syria, Tunisia and Turkey -- plus Palestinian controlled areas. It replaces a series of existing bilateral protocols on rules of origin with a single convention covering all the countries. The EU's rules of origin require exporters to prove that a minimum level of added value was created in goods produced domestically from imported raw materials, in order to qualify for preferential EU import tariffs. Under the new agreement, the added value of goods produced in more than one participating country can be added together when determining if a product meets the minimum threshold. The combined value of the trade in goods between the EU and the Middle East and North Africa was €140 billion in 2010. (Various 14.04)

Back to Table of Contents

5.11 Cairo Seeks Approval for E£10 Billion Increment To Subsidy Bill

The Egyptian cabinet has sought the approval of the Supreme Council of Armed Forces for an additional E£10 billion to finance subsidies in the current FY2010/2011 budget. The supplement will be targeted towards slowing down rising food prices. Egypt's Prime Minister Sharaf directed that food supplies offered at government cooperatives and other distribution points be increased to lower prices. Given the rise in international food prices, it was expected that the government would continue to boost spending on food subsidies to counter rising inflationary pressures (which up until March 2011 had continued to be led by food prices), especially under the current fragile economic and political environment. The government had set allocations for the food subsidy in its FY2010/2011 budget (July 2010 to June 2011) around E£13.6 billion, of which E£12.3 billion had been spent until December 2011. To that end, however, an additional E£2.8 billion had already been allocated early in February 2011. Egypt's fiscal deficit has already come under pressure following the unfolding political situation where we expect that the fiscal deficit will widen to 9% by June 2011 before deteriorating further to 10% by June 2012, mainly on the account of a deceleration in revenue growth, and a continued rise in expenditure which is predominantly led by current expenditure on subsidies. (Beltone 14.04)

Back to Table of Contents

5.12 Egypt Budget Deficit May Exceed 10% in 2011/12

Egypt's budget deficit may exceed 10% of GDP in the next fiscal year as the government responds to demands for jobs and higher wages in the wake of a popular uprising, its finance minister said. Samir Radwan, speaking to the Egyptian community in Saudi capital Riyadh, reiterated Egypt needed $10 billion in the fiscal year beginning in July to ease the strain. The budget deficit will rise to 9.1%, from 8.5% in 2010-2011. Next year, Egypt will need $10 billion to support the balance sheet. Earlier this month, Radwan forecast the deficit would surge somewhere between 9.1 to 9.2% of GDP in the 2011/2012 fiscal year. He also said that Egypt is still in talks with the International Monetary Fund for a $3 billion to $4 billion loan and the country's economy should grow faster next year than in 2011. (Various 26.04)

Back to Table of Contents

5.13 Egyptian Government to Double Food Subsidies

The Egyptian government plans to double subsidies of ration card commodities, amounting to E£26 billion this fiscal year. The decision was made in response to the global price increases of wheat, sugar and cooking oil. The government is concerned about a shortage of rice supplied for ration card purchase due to an exorbitant price hike on the local market. The cost of rice has reached E£4,000 per ton and the General Authority for Supply Commodities is importing large quantities of the grain to offset a projected shortage in the coming two months. Ration card holders can only purchase half their cooking oil allocation because of a similar supply shortage. Unrest over food prices has had significant effect at various times in Egypt's recent history. (El Masry Il Youm 22.04)

Back to Table of Contents

5.14 Egypt Unrest Leads To Plunge in February Tourism Revenue

Egypt's tourism revenue fell by more than half in February as political turmoil frightened tourists away and prompted countries to warn their citizens against visiting the country. The 18 day popular uprising and the ouster of former president Mubarak saw much of Egypt's economy grind to a halt and also hit its tourism industry, a top foreign currency earner and source of over a tenth of gross domestic product. The number of tourists visiting Egypt in February slumped to 211,000 from 1.1 million in the same month last year. The state statistics agency said tourism spending fell in the month to $385 million compared with $825 million in February 2010. A slide in foreign exchange earnings has helped weaken the Egyptian pound by 2.45% against the dollar since the start of the political turmoil. Egypt earned nearly $11 billion from tourism in 2009, according to the Tourism Ministry, and more than 7 million tourists visited in the first half of 2010. Egypt had been aiming to attract 15 million visitors for the full year. In the months before the crisis, Egypt brought in about $280 million a week from tourism. (Various 17.04)

Back to Table of Contents

5.15 USAID's Egypt Program to Address Economic Development

The US Agency for International Development (USAID) has announced that its annual assistance program in Egypt, scheduled to be implemented in mid-2011, should satisfy the direct needs of Egypt in the fields of employment, economic development and combating poverty. USAID allocated a significant portion of its assistance over the past years to bolstering democracy in Egypt. USAID said the program will be implemented with the help of NGOs, Egyptian, American or international, and the private sector. USAID also said it is seeking to respond to the needs specified by the Egyptian community in the field of democratic development. The agency said it has worked over the past five years with the Egyptian government and other local NGO's to improve the living standards of Egyptians. It said there has been notable progress in the fields of education, economic growth, health, water, agriculture, natural resources, and the environment, as well as in democracy and civil society. (AMIY 24.04)

Back to Table of Contents

5.16 Fitch Downgrades and Withdraws Libya's Ratings

On 13 April, Fitch Ratings (http://www.fitchratings.com) downgraded Libya's Long-term local and foreign currency Issuer Default Ratings (IDR) to 'B' from 'BB'/RWN. The ratings have been removed from Rating Watch Negative and assigned a Stable Outlook. The agency has also downgraded the Country Ceiling to 'B' from 'BB' and affirmed the Short-term rating at 'B'. Fitch has simultaneously withdrawn all the ratings. The downgrade to the 'B' rating category reflects extreme political instability, a collapse in oil production and the freeze on Libya's sovereign external assets following the imposition of UN sanctions. The Stable Outlook balances the severity of the political and economic situation with the limited further downside to creditworthiness given the absence of sovereign debt. Fitch is withdrawing the ratings because it has insufficient information to maintain coverage of the issuer. (Fitch 13.04)

Back to Table of Contents

6: TURKISH, CYPRIOT, GREEK & BULGARIAN DEVELOPMENTS

6.1 Cyprus' Harmonized Inflation Steady at 3.2% in March

Cyprus' EU-harmonized index of consumer prices (HICP) was almost steady in March, with prices rising by 3.2% over the year earlier, having risen by 3.1% in February. However, the rate of inflation was higher than in March 2010, when an annual inflation rate of 2.3% was recorded. The national consumer price inflation rate reported last week was 2.8%. (FM 13.03)

Back to Table of Contents

6.2 Greece's Budget Gap Wider Than Estimated

Greece's 2010 budget gap was more than 1% wider than the government estimated after a review by Europe's statistics agency, the latest blow to the nation's finances as it seeks to avoid a debt restructuring. Last year's shortfall was 10.5% of GDP, compared with 15.4% of GDP in 2009, Eurostat said on 26 April from Luxembourg. In February, the Greek government had said it met its revised target for a 9.4% deficit in 2010. The revision is another setback in Greece's efforts to meet targets set out under last year's €110 billion ($160 billion) bailout from the European Union and the IMF. The government still aims to cut the deficit to 7.4% of GDP this year, and earmarked €3 billion in unspecified savings to account for fiscal slippage in 2011 as part of €26b in measures announced on April 15.

Greece's government said it remained committed to meeting the targets of its bailout program and stood ready to take further measures to lower the deficit. The wider gap was due to a larger-than-expected economic contraction last year as well as deterioration in tax revenue and worsening finances at local governments, social-security funds and public hospitals, the Finance Ministry said in an e-mailed statement. Greece's economy shrank 4.5% last year, compared with the 4.2% forecast in November when the 2011 budget was announced.

Greece's state-controlled pension funds recorded a deficit of €500m in 2010, instead of an initially reported €900m. Greece plans to implement deficit cuts this year originally scheduled for 2012 to offset a wider-than-anticipated 2010 budget gap. The measures announced by Prime Minister George Papandreou earlier this month consist mostly of spending cuts and aim to bring the deficit below 1% by 2015. They go further than the demands set out under the bailout, which require Greece to cut the shortfall to less than 3% by 2014. The government also announced plans on April 15 to raise €15 billion in state-asset sales by the end of 2013 and €50 billion by the end of 2015. (Various 26.04)

Back to Table of Contents

Greek Health Minister Loverdos presented a plan to merge a number of state hospitals in Athens and Piraeus and warned that if his effort to restructure the public health service fails, the government will only be able to fund 60% of the institutions that currently treat patients. The merger will initially involve sharing department clinics and directors, Loverdos said as he opened a discussion with medical experts and representatives of academic and social groups. According to the Health Ministry, there are currently 26 general hospitals in Attica, which have a total of 450 departments and 9,000 clinics. Loverdos also sacked the director and deputy director of the Alexandra Hospital, following an internal investigation. The director informed the Health Ministry recently that the university hospital was no longer able to accept patients during duty hours because of a lack of beds and supplies. An initial investigation by inspectors revealed that there were many beds available and no serious problems with supplies. (ekathimerini 19.04)

Back to Table of Contents

6.4 Bulgaria's Annual Inflation Rate Reaches 5.6%

Bulgaria's annual inflation rate reached 5.6% in March 2011, according to the country's National Statistical Institute's consumer price index (CPI). The consumer price index in March 2011 compared to February 2011 was 100.6%, i.e. the monthly inflation was 0.6%. The inflation rate since the beginning of the year (March 2011 compared to December 2010) was 2.4%. The annual average inflation, measured by CPI, in the last 12 months (April 2010 - March 2011) compared to the previous 12 months (April 2009 - March 2010) was 3.5%. The harmonized index of consumer prices (HICP) in March 2011 compared to March 2010, i.e. the annual inflation, was 4.6%, while the monthly inflation in March 2011 compared to February 2011 was 0.4%. The inflation rate since the beginning of the year (March 2011 compared to December 2010) was 1.4%. The annual average inflation, measured by HICP, in the last 12 months (April 2010 - March 2011) compared to the previous 12 months (April 2009 - March 2010) was 3.7%. The consumer price index (CPI) is the official measure of inflation in Bulgaria. The Harmonized Index of Consumer Prices (HICP) is the comparable measure of inflation across EU member states. HICP is one of the criterions of price stability and for readiness of Bulgaria to join the euro-zone. (SMN 13.04)

Back to Table of Contents

6.5 Bulgaria's Unemployment Rate Down to 9.5% in March 2011

The number of unemployed Bulgarians is down by nearly 10,000 people in March, 2011, compared with the previous month, according to the Bulgarian Employment Agency. The registered unemployed people were 352,493 in March, or 9.5% of the active population. The decrease of the unemployment rate is attributed to the business hiring people for summer jobs with 24,000 individuals finding work in March. Two thirds of them began working for private companies; the rest have been included in programs for subsidized employment. Another positive trend is the reduction of unemployment among those younger than 29 and older than 50. The most job openings have been in the industry sector with 2,619 new jobs. There were also 6 times more openings in the tourist sector, compared to February, and 2.5 more in farming. (SMN 15.04)

Back to Table of Contents

6.6 Bulgaria Has Highest Projected GDP Growth in EU10

Bulgaria, where the 2009 financial crisis hit later than elsewhere, is set to see the biggest improvements in growth in 2011 and 2012 among European Union newcomers, according to a World Bank report. Two and a half years after the global financial crisis began, the economic activity in the EU10 rebounded in parallel with the EU15, according to the World Bank's new EU10 Regular Economic Report. The pace of recovery among EU10 countries will strengthen in 2011 and 2012, but it will be different in each of the 10 states, namely Bulgaria, the Czech Republic, Estonia, Hungary, Lithuania, Latvia, Poland, Romania, Slovakia and Slovenia. Concerning Bulgaria, the World Bank expects an improvement in GDP growth from 0.2% in 2010 to 2.5% in 2011 and 3.4% in 2012. In addition, the EU10 recovery is still jobless. (SMN 21.04)

Back to Table of Contents

6.7 Bulgarian Government to Go For State Tourism Advertising Company

Bulgaria's Economy Ministry is going ahead with setting up a "Bulgarian Tourism Association" State Company to manage the country's national marketing and tourist image, according to the draft Tourism Act. The future State Company "Bulgarian Tourism Association" is said to be in charge of Bulgaria's tourism advertising, participation in international expos, and the development of marketing strategies and communication campaigns. It will feature a consultative council with representatives of the business tourism associations. The proposed state company for Bulgaria's national advertising will be subordinate to the Economy Minister. It will be funded with 10% of the total revenues from tourist tax, 50% of all fines under the Tourism Act, fees from tourism expos as well as additional state funding. The draft law published by the Ministry of Economy, Energy &Tourism further provides for dividing Bulgaria into tourist regions to be under the responsibility of organizations for destination management.

Upon taking in 2009, the Borisov Cabinet shut down the former State Tourism Agency and turned the Economy and Energy Ministry into a Ministry of Economy, Energy & Tourism. This restructuring does not appear to have produced much in terms of tangible benefits for the development of tourism in Bulgaria. (SMN 13.04)

Back to Table of Contents

6.8 Bulgarian IT Sector Doubles Attracted EU Funds In 2010

Bulgarian IT companies and R&D organizations attracted a total of €4m in EU funding for IT projects in 2010, Bulgaria's Ministry of Transport and ITC announced. While the sum is not impressive in absolute terms, it is double the EU money won by the Bulgarian IT sector in 2009. Thus, Bulgarian scientific institutes and private IT companies got a total of €3.2m for projects under the Seventh Framework Program, with additional €651,530 under the EU program for "Support of ITC Policies." According to the Ministry of Transport, IT and Communications, Bulgaria's scientific contribution is most significant in the field of common EU projects focused on digital culture, which deal with the develop of smart computer programs for text recognition in various European languages, including Slavic languages. The second major topic that Bulgarian ICT entities worked on with EU funding in 2010 was improving the competitiveness of the EU economy and the quality of life by developing and apply intelligent technologies. EU funded research and development IT activities on healthcare and IT security also saw Bulgarian contributions in 2010. (SMN 21.04)

Back to Table of Contents

7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Yom HaShoah - Holocaust Martyrs' & Heroes' Remembrance Day 2011

Israel will mark Holocaust Martyrs' & Heroes' Remembrance Day (Yom HaZikaron HaShoah ve-laGvura in Hebrew) beginning on Sunday evening, 1 May and Monday, 2 May. Holocaust Remembrance Day (Yom HaShoah) is a national day of commemorating the six million Jews murdered in the Holocaust. It is a solemn day, beginning at sunset on Hebrew date of 27 Nisan and ending the following evening. The internationally recognized date comes from the Hebrew calendar and corresponds to the 28th day of Nisan on that calendar. It marks the anniversary of the 1943 Warsaw ghetto uprising.

Places of entertainment are closed and memorial ceremonies are held throughout the country. The central ceremonies, in the evening and the following morning, are held at Yad Vashem and are broadcast nationally on television. Marking the start of the day, in the presence of the President and the Prime Minister, dignitaries, survivors, children of survivors and their families, gather together with the general public to take part in the memorial ceremony at Yad Vashem in which six torches, representing the six million murdered Jews, are lit. The following morning at 10:00, the ceremony at Yad Vashem begins with the sounding of a siren for two minutes throughout the entire country. For the duration of the sounding, work is halted, people walking in the streets stop, cars pull off to the side of the road and everybody stands at silent attention in reverence to the victims of the Holocaust. Afterward, there is a central ceremony at Yad Vashem, while other sites of remembrance in Israel, such as the Ghetto Fighters' Kibbutz and Kibbutz Yad Mordechai, also host memorial ceremonies, as do schools, military bases, municipalities and places of work. Throughout the day, both the television and radio broadcast programs about the Holocaust.

Back to Table of Contents

7.2 Israel Honors Fallen Soldiers With Jerusalem Service & National Siren

On Sunday night, 8 May and Monday, 9 May, Israel will observe Memorial Day. Events to mark Memorial Day for Israel's fallen soldiers will begin at 19:30 with a ceremony at the Western Wall in Jerusalem, attended by the Prime Minister, other dignitaries and bereaved families. At 20:00, a one-minute siren was heard across the country. The siren sounded again, for two minutes, at 11:00 on 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.

Back to Table of Contents

Celebrations for the 63rd anniversary of Israel's regaining its independence will begin on Monday evening, 9 May throughout the country, continuing throughout Tuesday, 10 May. 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 1,879 years earlier, was restored.

*REGIONAL:

Back to Table of Contents

7.4 New Speed Limit Set To Start on Abu Dhabi-Dubai Road

The speed limit on the main Abu Dhabi to Dubai highway will be cut to 140km per hour from 17 April. A decision by Abu Dhabi traffic police to reduce the speed limit from 160km per hour was announced earlier. The move is part of plans to improve road safety and comes just weeks after a major pile-up on the road which left one person dead and more than 60 injured. The crash, which was caused by dense fog, involved 127 vehicles and forced the road to close for about four hours. It said an average 9,000 vehicles use the 100km road stretch between the two cities per hour at peak time. Heavy duty trucks must also abide by the 80km per hours speed limit. In March 2008, three people were killed and 300 injured in a similar fog-shrouded pile-up on the same stretch of highway. (AB 16.04)

Back to Table of Contents

7.5 Saudi Women Press For Right To Vote

A group of Saudi women have recently turned up at a voter registration office in a rare public protest against the male-only electoral system. A symbolic attempt was made on 23 April to register for upcoming local elections in the Red Sea city of Jeddah. The head of the voter registration center "politely" turned down their applications to vote at the September municipal council elections after reminding them that women were still prohibited from voting. Women in Saudi Arabia are also banned from driving and cannot travel without being authorized by a male guardian. When in public, they have to cover from head to toe. The defiant attempt to register came after calls on social media networks for Saudi women to assert their rights, and against their exclusion from public life, after the electoral commission said women will continue to be excluded. Municipal elections, which are the only form of public voting in Saudi Arabia, are slated for 22 September. (BI-ME 24.04)

Back to Table of Contents

7.6 Demolition Begins On Monument To Humanity In Eastern Turkey

Workers began the demolition of Kars' Monument to Humanity on 26 April, removing the 19-ton head of one of the figures following some technical difficulties. There will be no reversal of the contentious demolition, the Kars Municipality said, adding that the work should be completed within 10 days. A cable used in the demolition process snapped four times before the contractors, who shouted "Allahu Akbar" (God is Great) before beginning the work, were able to remove the head via crane. The firm decided to place the first head in a cargo truck after a smaller truck was unable to transport the massive head. The head will be delivered to a storage site belonging to the municipality in the eastern province.

During a visit to Kars in January, Turkish Prime Minister Erdogan called the monument "freakish" and said it threatened to overshadow historical sites in the area. After Erdogan called for the sculpture's demolition, the municipal assembly in Kars passed a motion to tear down the monument, saying it had been illegally erected in a protected area. Sculptor Mehmet Aksoy said in January 2010 that they had wanted a monument of peace as opposed to other monuments with messages of war and hatred. Aksoy has also warned that a demolition of the monument would resemble the Taliban's destruction of ancient Buddhist statues in Bamiyan, Afghanistan, in 2001 and be an embarrassment for EU-candidate Turkey. (Hurriyet 26.04)

Back to Table of Contents

8: ISRAEL LIFE SCIENCE NEWS

8.1 EarlySense Chose Massachusetts for U.S. HQ After Governor Patrick's Trade Mission

Ramat Gan's EarlySense (http://www.earlysense.com), Governor of Massachusetts Patrick and the Massachusetts Life Sciences Center announced on 14 April that Israel-based EarlySense, developer of the EverOn contact-free patient monitoring system, has chosen to locate its U.S. headquarters in Massachusetts. The decision follows the March 2011 visit to Israel by Governor Patrick and a delegation of state leaders from industry, academia and government to promote mutually beneficial collaborations between Massachusetts and Israel. The company intends to hire 10 employees in Massachusetts before the end of the year and has plans to hire an additional 10-20 employees annually thereafter. EarlySense and MetroWest Medical Center (MWMC) also announced today that MWMC has become the first hospital in Massachusetts to commercially implement EarlySense's contact-free patient monitoring system.

EarlySense's System is an FDA and CE cleared, automatic, continuous, patient monitoring system approved for use in hospitals and homes. The system activates the moment the patient enters the bed using a contact-free sensor that slips under the mattress and never touches the patient. The system records and documents cardiac, respiratory, and motion parameters for up to 36 patients at a time and alerts staff when thresholds are crossed, as well as if a patient needs turning to avoid pressure ulcers or is leaving the bed and is in danger of falling. Nurses are informed of patient status changes on the patient's bed side monitor, at the nurse's station, on their mobile phones and on a large screen display mounted in a prominent spot on the wall in the department.

Last month, Governor Patrick led a coalition of the Commonwealth's leading business executives and state economic development officials on an economic development mission to Israel and the United Kingdom. The Massachusetts delegation focused on job-growth opportunities in the innovation industries, including life sciences, technology, financial services and clean energy sectors. (EarlySense 14.04)

Back to Table of Contents

8.2 WFD Ventures Portfolio Company Gains FDA Approval for Novel Cancer Treatment

WFD Ventures, a venture capital firm focused on breakthrough medical products, announced the achievement of an important milestone for its portfolio company, NovoCure. The U.S. FDA granted NovoCure approval to market its treatment for glioblastoma multiforme (GBM). WFD Ventures began working with NovoCure in 2003 and made its initial investment in 2004 to support the first-in-man clinical trials. The FDA approval of the NovoTTF device is the culmination of ten years of research, development and clinical trials conducted by an exceptional team of scientists, engineers, and clinicians. WFD Ventures looks forward to bringing this device to recurrent GBM patients and their families and developing NovoTTF therapy for a range of additional solid tumor cancers. NovoCure Limited (http://www.novocure.com) is a private oncology company pioneering a novel therapy for solid tumors. NovoCure's worldwide headquarters is located in the Jersey Isle. NovoCure's U.S. operations are based in Portsmouth, NH and the company's research center is located in Haifa, Israel. (WFD Ventures 15.4)

Back to Table of Contents

Taro Pharmaceutical Industries received approval from the U.S. FDA for its Abbreviated New Drug Application (ANDA) for Imiquimod Cream, 5% (imiquimod cream). Taro's imiquimod cream is a prescription pharmaceutical product used for topical treatment of actinic keratosis and external genital warts and is bioequivalent to Aldara Cream, 5% of Graceway Pharmaceuticals. According to industry sources, imiquimod cream had annual sales of approximately $340 million in the U.S. Haifa's Taro Pharmaceutical Industries (http://www.taro.co.il) is a multinational, science-based pharmaceutical company, dedicated to meeting the needs of its customers through the discovery, development, manufacturing and marketing of the highest quality healthcare products. (Taro 18.04)

Back to Table of Contents

8.4 ETView Medical & Stopler Belgium Execute Distribution Agreement

ETView Medical has entered into a distribution agreement with Stopler Belgium. The agreement enables Stopler to market ETView's lead product, TVT, for a period of three years in Belgium. ETView's TVT combines high-flow ventilation airway management with continuous video monitoring to overcome current limitations and associated adverse surgical events during lung isolation surgeries. Other terms were not announced. Stopler Belgium is a division of the SIMED Group (Stopler International Medical), a European based diversified health care provider, with a wide range of activities including distribution of medical equipment in Holland and Belgium.

ETView Medical (http://www.etview.com) is a commercial-stage, publicly traded medical device company that has successfully combined airway management with continuous direct airway visualization for medical professionals. ETView's patented TVT technology saves physician procedure time and is expected to provide better patient outcomes in multiple thoracic surgical procedures as well as with chronic ventilator dependent patients. (ETView 18.04)

Back to Table of Contents

8.5 KAHR Medical Raising $3 Million for Novel Cancer Drug Development

KAHR Medical and Hadasit Bio-Holdings announced the signing of an investment agreement in KAHR's initial external strategic fundraising. The parties announced that $2m will be invested by the European drug giant Sanofi-Aventis, while Hadasit Bio Holdings, the main shareholder in KAHR, will invest $1m in cash and will convert $2m of convertible loans that were granted to the company. Further financial details were not disclosed. The parties announced that the agreement contemplates a second closing of up to $5m at the same terms for a limited time including up to $1m from Sanofi. The capital will be used to fund the pre-clinical development and a Phase-I/II clinical trial of the company's lead product as well as the identification of new drug candidates based on KAHR's platform technology.

KAHR Medical (http://www.kahr-medical.com) is a portfolio company of Hadasit Bio-Holdings. KAHR Medical is developing a technology platform known as SCP (Signal Converter Proteins), which allows the construction of protein-based drugs with two functional sides. In contrast to current biological drugs that possess only one functional side, the two functional sides of SCPs allow these drugs to block or activate two reinforcing biological signals at the same time. The SCP platform forms a new generation of biological drugs with great diversity and superior efficacy. Hadasit Bio-Holdings (http://www.hbl.co.il) is the publicly traded holding company of Hadasit, the technology transfer company of Hadassah Medical Organization. Hadasit Bio-Holdings invests in seven portfolio biotech companies that are based on Hadassah scientific research. (KAHR 14.04)

Back to Table of Contents

8.6 BioControl Medical Launches INOVATE-HF IDE Study of CardioFit System

BioControl Medical announced first patient enrollment in the INOVATE-HF (INcrease Of VAgal TonE in Heart Failure) clinical study at Northwest Texas Heart Hospital, Amarillo, Texas. INOVATE-HF is a global, multi-center investigational device exemption (IDE) clinical study to determine the safety and efficacy of BioControl Medical's CardioFit system, an implantable electrical stimulation device designed to improve heart function in patients with congestive heart failure (HF). The prospective, randomized, controlled study is designed to evaluate the system's potential to reduce hospitalization and death among patients with HF, while also exploring whether combined treatment with CardioFit and prescription drug therapy is more effective than drug therapy alone. Results of the study will be used to support a Premarket Approval Application (PMA) to the U.S. FDA for market clearance of CardioFit.

Headquartered in Yehud, BioControl Medical (http://www.biocontrol-medical.com) develops and markets advanced implantable devices for the treatment of autonomic disorders, conditions whereby the autonomic nervous system ceases to function properly, resulting in a disruption to the control of involuntary body processes. The devices enable controlled electrical stimulation of various nerves to achieve therapeutic results. (BioControl 26.04)

Back to Table of Contents

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Connect One's Mobile Hotspot Extended to Android and Blackberry

Connect One has upgraded Wi-REACH Classic to include connectivity for Android and Blackberry smartphones and other devices requiring high-level Wi-Fi security. Wi-REACH Classic, a compact, battery-operated, mobile, personal Wi-Fi hotspot, transforms an existing 3G USB modem into a personal Wi-Fi cloud that can be easily shared between as many as eight Wi-Fi devices. With this release, Connect One's Wi-REACH Classic extends its connectivity for laptops, netbooks and tablet PCs to high-security smartphones and internet-connected devices. Building on the success of its Wi-REACH Classic personal hotspot, Connect One has improved and enhanced the product's feature set. The addition of an access point infrastructure mode greatly increases Wi-REACH Classic's usability with all Wi-Fi devices. In addition to supporting more than 150 3G modems worldwide, Wi-REACH Classic's innovative technology extends this support to smartphones, as well as identifies any 3G USB modems and attempts to deliver connectivity to unlisted modems. Established in 1996, Kfar Saba's Connect One (http://www.connectone.com) is widely regarded as the Device Networking Authority, with many innovative firsts to its credit. The company manufactures semiconductors, modules and products that facilitate secure, reliable and robust Internet Protocol-based communication for everyday devices. (Connect One 15.04)

Back to Table of Contents

9.2 Ethernity Networks is Awarded a Key Patent on Ethernet MAC

Ethernity Networks has been awarded patent number 7,924,863 by the US Patent Office for a "DEVICE AND METHOD FOR PROCESSING DATA CHUNKS." The invention relates to methods and devices for managing data chunks, especially in multi-port aggregation devices, which dramatically decrease the logic needed for multiple-port Ethernet/IP aggregation implementation in FPGA or ASIC. The patent also applies to the support of any other multiple-port design including ATM, PPP or TDM. Lod's Ethernity Networks (http://www.ethernitynet.com) develops and provides FPGA based Carrier Grade Fabric Flow Processors for telecommunication and data communication platforms enabling the Programmable Network. The ENET architecture is based entirely on Ethernity technology and is protected by five patents. E thernity Networks' products target Broadband Access, Mobile Backhaul and Metro Ethernet market spaces. (Ethernity 14.04)

Back to Table of Contents

ECI Telecom and Singapore-based ECS Technology, the leading ICT distributor in China, have announced a partnership that appoints ECS as the premier distributor of ECI solutions in the country. ECS will incorporate ECI's1Net next-generation platforms and solutions into its portfolio, strengthening ECI's presence in China. ECI brings the 1Net framework to the market, which addresses their customers' pain points, such as time to market of new offerings, how to leverage existing infrastructure to offer new services, and how to transition to next-generation networks efficiently. ECI has been a significant vendor in China since 1994, successfully targeting telcos, utility and transportation companies and the military in the country. ECI's 1Net solutions offer a unique combination of multi-functional equipment and service expertise to provide ECS customers with fully integrated solutions for reduced total cost of ownership (TOC), new revenue opportunities and optimal network transition management

Petah Tikva's ECI Telecom (http://www.ecitele.com) delivers innovative communications platforms to carriers and service providers worldwide. ECI provides efficient platforms and solutions that enable customers to rapidly deploy cost-effective, revenue-generating services. Founded in 1961, ECI has consistently delivered customer-focused networking solutions to the world's largest carriers. The Company is also a market leader in many emerging markets. ECI provides scalable broadband access, transport and data networking infrastructure that provides the foundation for the communications of tomorrow, including next-generation voice, IPTV, mobility and other business solutions. (ECI 14.04)

Back to Table of Contents

9.4 Gizmox Launches First .Net Development Tool for Cross-open Browser/Mobile Standards

Gizmox announced the launch of ProStudio .NETHTML5 beta, the only HTML5 dedicated development tool for Microsoft .Net developers. ProStudio .NETHTML5 enables fast and secure development of graphic-rich data-centric .NET apps for all platforms without plug-ins and resolves the data-binding, session management and Ajax complexities for data-centric applications by using simple .NET tools. With this offering Gizmox offers .NET developers a way into the new Web standard, HTML5. ProStudio .NETHTML5 is designed for building data-centric HTML5 applications within Microsoft Visual Studio. This empowers all web developers (including those who seek an alternative to propriety Silverlight which currently does not support the popular iOS and Android platforms for tablets and mobile) to use simple .NET development practices and for jQuery developers to deal with the data-binding, Ajax and session management challenges by using straightforward .NET framework. This version adds the complete jQuery extension and animation capabilities into Visual WebGui which allows developers to build rich, customer facing HTML5 UIs with animation and media streaming and also provides mobile & tablet support and cross-browser performance. Other benefits include enhanced data management features and more effective debugging capabilities.

Tel Aviv's Visual WebGui (http://www.visualwebgui.com) is the first secured-by-design .NET open source Ajax empowered Web/Cloud and Mobile HTML and HTML5-based application platform. It reproduces uncompromised desktop functionality richness on the Web, Cloud and Mobile at commoditized costs. The Visual WebGui solution offers features that build, migrate, run and manage Web, Cloud and Mobile applications. It removes the Ajax complexities and limitations for business applications, as well as the web cloud and mobile's single most limiting factor – the network limitation. (Visual WebGui 14.04)

Back to Table of Contents

9.5 Voxbone & Jajah Create Service That Localizes International Calling

Belgium's Voxbone has collaborated with Jajah to develop a value-added telecommunications service that makes international calling simple and affordable. The International Favorites service, which Jajah provides for mobile customers of O2 in the United Kingdom, offers a subscriber a virtual overseas number so friends and family abroad can call at local rates. As part of the new service, Voxbone supplies an international "Call Me" number that directly reaches a customer's mobile phone. The customer adds this second phone number from a country of choice to an existing mobile subscription. Calls to the number are dialed, delivered and billed like local PSTN calls. These calls are transmitted through Voxbone's IP network to the O2 user's mobile phone. The subscriber doesn't need a special phone or application.
The virtual number complements the subscriber's U.K. mobile number, enabling two phone numbers to be mapped to the same device. The service works with most O2 phones.

Ra'anana's Jajah's (http://www.jajah.com) IP Communications Platform offers flexible, next-generation integrated communications solutions for enterprises, telecommunications companies and individuals. Jajah's award-winning services make it easier for people to stay in touch using any device, on any network, anywhere. Leveraging a universal open telecommunications platform, Jajah's managed services allow mobile operators, landline carriers, cable companies, technology companies and other businesses to adopt its voice solutions with minimal investment and time to market. (Voxbone 14.04)

Back to Table of Contents

9.6 IMI Develops Safety Mechanism for Hand Grenades

Israel Military Industries (http://www.imi-israel.com) has jointly developed with the IDF a proprietary mechanism to ensure that hand grenades will not explode if hit by shrapnel or a bullet. The mechanism successfully passed a number of tests in the past few weeks. IMI said that the new mechanism separates the sensitive explosives in the grenade and its operating mechanism. If the grenade is exposed to an external blow, it prevents an explosion from being set off, thereby ensuring the safety of the soldiers in the vicinity. Externally, the IMI's safety grenade looks like an ordinary grenade; the main difference is in its internal operating mechanism. IMI says that tests of the new grenade will soon be completed, after which the new mechanism will be included in all grenades for the IDF. The new grenade might also interest foreign armies, given similar incidents in various battlefields. (Globes 20.04)

9.7 Mellanox Introduces SwitchX with Virtual Protocol Interconnect Technology

Mellanox Technologies announced the immediate availability of its next-generation switch silicon, SwitchX with Virtual Protocol Interconnect (VPI) technology, providing industry-best performance, efficiency and scalability for up to 36-ports of FDR 56Gb/s InfiniBand or 40 Gigabit Ethernet. With unprecedented levels of on-chip and SerDes integration, SwitchX can operate as an InfiniBand switch or Ethernet switch (including Data Center Bridging - DCB) with extremely low-latency and power while providing best-in-class switching capabilities in each category. In addition, the IC includes integrated convergence technology for Fibre Channel NPIV gateways. SwitchX provides more than 4Tb/s of non-blocking switching throughput and allows new levels of protocol flexibility, simplicity and reliability to eliminate networking bottlenecks in modern data centers for server-to-server, server-to-storage or storage-to-storage connectivity. SwitchX delivers next-generation service-oriented switch capabilities and enables convergence of LAN (Local Area Network), SAN (Storage Area Network) and IPC (Inter Processor Communications) service architectures.

Yokneam's Mellanox Technologies (http://www.mellanox.com) is a leading supplier of end-to-end InfiniBand and Ethernet connectivity solutions and services for servers and storage. Mellanox products optimize data center performance and deliver industry-leading bandwidth, scalability, power conservation and cost-effectiveness while converging multiple legacy network technologies into one future-proof architecture. The company offers innovative solutions that address a wide range of markets including HPC, enterprise, mega warehouse data centers, cloud computing, internet and Web 2.0. (Mellanox 25.04)

Back to Table of Contents

9.8 TowerJazz Announces Availability of Highest Speed Foundry SiGe Technology

TowerJazz announced the availability of SBC18H3, the industry's highest speed foundry SiGe technology. The technology addresses next-generation needs for high-speed interfaces in communication protocols such as Thunderbolt, optical fiber and high-data rate wireless by improving performance while reducing noise and power consumption of key building blocks. SBC18H3 also targets applications such as automotive collision avoidance systems, millimeter-wave radar and GHz imaging. SBC18H3 is TowerJazz's third generation 0.18um SiGe technology and offers transistors with 240GHz Ft and 260GHz Fmax in a cost-effective and analog-friendly 0.18um node. The technology is built on the same mature integration platform used for the prior two TowerJazz SiGe processes now in high-volume production (SBC18H2 at 200GHz and SBC18HX at 155GHz). IP of high-speed components such as TIAs, Laser Drivers, SerDes, CDRs from H2 and HX can be readily ported to the new H3 process since they are all in the same 0.18um node, allowing them to benefit from improved performance as well as reduced power consumption and noise.

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. (TowerJazz 26.04)

Back to Table of Contents

10: ISRAEL ECONOMIC STATISTICS

10.1 Israel's CPI Rises By 0.2% in March

The Central Bureau of Statistics announced that Israel's Consumer Price Index rose by 0.2% in March to 102.5 points, well within the range of pundits' estimates. Inflation year to date is 0.7% and over the past twelve months 4.3%. This is higher than the government's 1 - 3% target range for the annual rate of inflation. According to trend figures for December 2010 to March 2011, the annual rate of inflation is currently running at 5.7%, and 5.1% excluding housing. In the wake of an unexpectedly high inflation figure for February, the Bank of Israel raised its interest rate by 50 basis points, which was more than analysts had predicted. The March CPI was affected mainly by price hikes in the following categories: Housing services (0.6%), car oils and petrol (2.5%), vacations and recreation (3.3%), and meat, poultry and fish (0.5%). The rise in the housing item was offset by large falls last month in prices of fruit and produce (-4.0%) and clothing and footwear (-2.1%). Vegetable prices fell by 7.6% and fresh fruit prices were down by 4.2%. (CBS 15.04)

Back to Table of Contents

10.2 State of Economy Index Rises 0.5% in March

The Bank of Israel's Composite State of the Economy Index rose 0.5% in March 2011, reflecting continuing economic growth, driven by increases in domestic and export demand. The Bank of Israel also revised the index for January and February upwards by 0.1% to 0.6% and 0.5%, respectively. Almost all components of the index continued to rise for the second consecutive month to show increases. The index of manufacturing production rose 2.1% in February, after rising 2.3% increase in January. The trade and services revenue index rose 0.5% in February, after 1.2% rise in January. The services exports index jumped 13.9% in March, after rising 2% in February. The index of imports of production inputs rose 1.2% in March, after rising 4% in February. The goods exports index rose 2.6% in March, after rising 3.6% in February. The index of consumer goods imports rose 4.1% in March, after falling 4.8% in February. (BoI 17.04)

Back to Table of Contents

On 17 April, the Central Bureau of Statistics announced that the third estimate of economic growth in H2/10 indicates a growth rate of 5.6% in GDP and 6.3% in business GDP. Analysis of developments by quarter shows that GDP rose in Q4/10 by an annual rate of 7.8%, higher by 0.1% than the second estimate, after a 4.6% rate of growth in the third quarter. Output of the finance and business services sector grew by an annual 14.0% in H2/10. Output of the construction industry rose by an annual 7.4% and output by the transport and communications industries rose by an annual 5.5%. There were declines in output of manufacturing industry, down by an annual 4.3% and of the hospitality industry, down by an annual rate of 5.8%. (CBS 17.04)

Back to Table of Contents

10.4 Israel's First Quarter Trade Deficit $4.3 Billion

For March 2011, Israel's import of goods (excluding diamonds) amounted to $5.9b. Imports were 36% from the EU, 22% from Asia, 12% from the US and the remaining 30% from other countries. Exports of goods (excluding diamonds) totaled $4.3b in March, and the trade deficit was a $1.6b. Exports of goods to EU countries accounted for 30% of the total, exports to the US 27%, exports to Asia 18%, and exports to the rest of the world 25%. Trade balance data indicate that the trade deficit (excluding diamonds) jumped 253% and was $4.3b dollars in Q1/11, compared with a deficit of $1.7b in the same period last year.

Israel's export of services in February 2011 (not including start-ups) amounted to $2b. Seasonally adjusted, it saw a decline of 6.6% compared with the previous month. The decline is attributed to the drop in exports of tourism and transport services. This compares with an increase of 6.1% in services exports in the previous month (January 2011 compared with December 2010). Exports of services including start-up companies, seasonally adjusted, fell by 7.1% compared with January 2011. (CBS 17.04)

Back to Table of Contents

10.5 Bank of Israel Report Says 60% of Poor Israelis Work

About two-thirds of Israel's poor live in households with at least one breadwinner, Bank of Israel economists said in an annual report submitted to the prime minister recently. According to the report, the poverty rate among all people living in households with at least one breadwinner reached 18% in the past two years – a particularly high rate both compared to the past and compared to other developed countries. According to the data, the problem is particularly noticeable in recent years among Israel's Arabs. According to the report, about two-thirds of the poor workers are Arab – a very high rate compared to their percentage in the general population (about one-fifth). Moreover, according to the Bank of Israel, about half of poor Israeli Arabs live in a home with one full-time breadwinner. The poverty figures among the workers' public, especially in light of the Israeli economy's impressive growth date, are concerning. They mostly raise the question why is it so difficult to provide for a family in Israel with dignity.

The central bank's economists are forced to admit that with the absence of suitable surveys, they are unable to answer this question. They note that the recent years have seen a significant rise in the rate of employed Arabs, and that this phenomenon may have led to the inclusion of more poor people in the working population, but add that there are phenomena which may have worked to create a reverse trend, such as a rise in the number of university graduates among the working population and other demographic groups with a relatively low poverty rate.

The causes of poverty among workers are diverse, the Bank of Israel notes, but two main factors stand out – a high number of household members and low earning power. These factors are shared by Haredi and Arab households and households of non-Haredi Jews. A low earning power stems from poor education or an education that does not match the labor market's demands, working in occupations characterized by a low salary or in industries in which the average salary is relatively low. Poor workers receive about half, and even less, of the salary other workers with similar characteristics receive. Moreover, poor workers' low salary often stems from the weak enforcement of labor laws in Israel, with a high percentage of employees earning less than the minimum wage. (Ynet 22.04)

Back to Table of Contents

10.6 Industrial Production Continues to Rise

Another figure published today was industrial production, which rose in the period December 2010 - February 2011 by 5.6% (based on trend data). In February there was a rise of 0.6% in industrial production, following a rise of 0.5% in January, which constitutes a reversal of trend, after between July and November there was a drop in industrial production according to trend data. High tech stood out in February, with output by high-tech firms rising 1.1%, after rising by 0.8% in January. (CBS 17.04)

Back to Table of Contents

10.7 Masada Takes Over As Israel's Top Tourist Site

Masada climbed above the Biblical Zoo and the Ramat Gan Safari Park to become the most visited pay-to-enter tourist site in 2010, according to Dun & Bradstreet Israel. In 2010, 762,992 people visited Masada, compared with 718,902 visitors at Jerusalem's Biblical Zoo, which fell to second place from 2009. Masada's revenue rose 26% to NIS 34 million in 2010 from NIS 25.7 million in 2009. The third most visited pay-to-enter tourist site was the Caesarea Antiquities National Park, with 698,808 visitors. The Hermon National Park (Banias) - one of the source of the Jordan River in the Golan - rose from ninth place in 2009 to fourth place in 2010 with 663,000 visitors. Visitors to the Ramat Gan Safari Park fell sharply, pushing it down from the second most-visited site to the fifth. The Ein Gedi Nature Reserve was in sixth place, with 468,562 visitors in 2010, 12% more than in 2009. It was followed by the Hamat Gader hot springs in the Yarmouk River valley, the Underwater Observatory in Eilat, the Qumran Caves by the Dead Sea and the Yamit 2000 water park in Holon. Dun & Bradstreet Israel says that the aggregate revenue of Israel's top ten pay-to-enter tourist sites rose 13% to NIS 143 million in 2010. (Globes 20.04)

Back to Table of Contents

11: IN DEPTH

11.1 ISRAEL: Summary of Israeli High-Tech Company Capital Raising - Q1/11

On 13 April 2011 the findings of the IVC-KPMG Quarterly Survey conducted by the IVC Research Center were released. This Survey reviews capital raised by private Israeli high-tech companies from Israeli venture capital funds, foreign and other investors. The Survey is based on reports from 128 investors, of which 50 are Israeli management companies and 78 are other – including foreign – investment entities.

In the first quarter of 2011, 140 Israeli high-tech companies raised $479 million from venture investors – both local and foreign. This was the highest quarterly amount raised in the last two years, 39% above the amount raised by 100 companies in the previous quarter and 105% above that raised by 91 companies in Q1/10 (the weakest quarter in the past five years).

The average company financing round was $3.42 million in Q1/11, just short of the $3.44 million of the previous quarter, and sharply above the $2.57 million of the first quarter of 2010.

Eighty-seven companies attracted more than $1 million each. Of these, 20 raised from $5 million to $10 million each, 11 raised between $10 million and $20 million and three raised more than $20 million.

Israeli VC Fund Investment Activity

In the first quarter of 2011, Israeli venture capital funds invested $137 million in Israeli companies - the highest quarterly amount in the last two years. It was 47% above the amount invested in the previous quarter, and 76% above investments made in the first quarter of 2010.

Koby Simana, CEO of IVC Research Center observed that "The first quarter of 2011 brought a surprisingly large increase in capital raised by Israeli high-tech companies. When we look at the data, we see that the share that came from Israeli venture capital funds held at around 30%, and the majority of the increase is traced to financing rounds - totaling $157 million - in which Israeli VC funds did not participate, three times the amount in the previous quarter. The good news for Israel's high-tech industry is that it was able to meet its financing needs in large part via foreign investors, as well as non-VC Israeli investors."

The Israeli VC fund share of the total amount invested in Israeli high-tech companies was 28%, compared to 27% ($93 million) in Q4/2010 and 33% ($78 million) in Q1/2010. The remainder of capital came from foreign as well as non-VC Israeli investors.

First investments by Israeli VC funds accounted for 23% of their total dollar investments in the first quarter, compared to 25% and 24% in Q4/2010 and Q1/2010, respectively. The average First investment by Israeli VC funds was $1.88 million, while the average Follow-on investment was $1.15 million.

Israeli VC Fund Activity in Foreign Companies

Israeli VC funds invested $56 million in foreign companies in Q1/11 (in addition to their investments in Israeli high-tech companies). This was the highest quarterly amount invested in foreign companies by Israeli VCs in the last decade and considerably more than the $8 million and $3 million invested in Q4/10 and Q1/10, respectively. Two of the six investments were first investments, with follow-ons accounting for the remainder.

Ofer Sela, partner in KPMG Somekh Chaikin's Technology group, said: "We've experienced another outstanding quarter for the life sciences sector, especially for diagnostic and medical device companies. Investors have given a vote of confidence to Israel as a center of excellence in these fields. Additionally, we are seeing somewhat of a recovery in seed stage investing, notably for the communications and Internet sectors, where investors received positive returns as a result of exits in the last two quarters. It's too early to determine if this recovery is sustainable, particularly since no new VCs were founded during the last 18 months."

Capital Raised by Sector

In Q1/11, the Life Sciences sector led capital raising, as in the previous quarter, with $127 million or 27% of total capital raised. Internet followed with $86 million or 18% and Software with $79 million or 16%. In each of the three sectors, amounts raised were the highest in the last two years. The Semiconductors sector followed with 12% of capital raised in the quarter.

Capital Raised by Stage

In the first quarter of 2011, seed companies attracted 3% of total capital raised, compared with 2% in the previous quarter and 5% in the fourth quarter of 2010. Mid Stage companies captured $238 million or 50% of the total capital raised.

IVC Research Center (http://www.ivc-online.com) is Israel's leading research center providing business leaders with an unmatched wealth of data on Israeli high-tech, venture capital and private equity industries. IVC products and services are used regularly by high-tech companies, venture capital funds, private investors, financial investors and institutions, as well as public entities such as the Office of the Prime Minister, the Central Bureau of Statistics, the Bank of Israel and the Office of the Chief Scientist.

KPMG Somekh Chaikin's technology professionals offer insights and experience gained from a long history of work with technology and life science companies. Through a global network of highly qualified professionals in Israel, the Americas, Europe, the Middle East, Africa, and Asia Pacific KPMG helps clients address the opportunities and challenges driven by new business models such as cloud computing, mobile services and others. (IVC 13.04)

Back to Table of Contents

11.2 JORDAN: Extending its Reach

Jordan has begun ramping up efforts to increase foreign investment into the kingdom and is looking farther afield than usual to do it. With the IMF revising down its economic growth projection for the Middle East and North Africa (MENA) region from 4.6% in January to 4.1% on April 11, Jordan has held meetings with business leaders from the US, Russia, China and even Azerbaijan in the last month to encourage investment. The IMF also predicted that Jordan's economic growth this year would be 3.3%, down from its October 2010 estimate of 4.2%.

For Jordan, foreign direct investment (FDI) is particularly important, given its limited natural resources and the structure of its economy, which is dominated by services, accounting for more than 70% of GDP. With the help of its burgeoning young population, Jordan is well placed to shift its focus to more knowledge-based industries that rely on a top-notch educational system.

To do this, Jordan has begun to reach out widely to encourage other countries' business leaders to invest in the kingdom. In early April, King Abdullah II invited US businesses to Amman to discuss investment opportunities in the country. "This king understands that times have changed, understands what's going on in the region [and] knows that he needs to respond to that," Myron Brilliant, the senior vice-president for international affairs at the US Chamber of Commerce, told reporters on his recent trip to Amman.

Though US trade with Jordan has reached more than $1b per year since the two countries signed a free trade agreement in 2001, US investment in the kingdom remains modest to date. Brilliant told media that he saw opportunities for US investors in Jordan's infrastructure, health care and tourism segments.

At another meeting King Abdullah held with Russian President Dmitry Medvedev in Moscow in early April the two leaders discussed ways the two countries can work together, particularly in regards to energy, railways and large-scale infrastructure projects. Developing the tourism sector is of utmost importance to Jordan, King Abdullah noted, emphasizing that religious tourism attracts growing numbers of Russians each year.

In a further move to enhance trade ties, Jordanian and Azerbaijani leaders signed and discussed agreements on investment promotion, development of information and communications technology, and technical cooperation in the Azerbaijani capital of Baku in mid-April. The aim is to develop joint private sector investment projects and enhance links between the two countries in the industrial, trade and tourism sectors.

Jordan is also working to establish itself as a launch pad of sorts for countries interested in expanding their businesses into Iraq. At a recent meeting with the China Council for the Promotion of International Trade, the Jordan Chambers of Commerce and Industry, and the Jordan Investment Board stressed the opportunities available in the kingdom in its energy, water, health care, logistics and education sectors, among others.

The kingdom is not ruling out opportunities closer to home, either. It is, for example, pairing with the UAE to promote tourism and tourism investment between the two countries, while also courting Kuwaiti investment, particularly in the industrial sector, via the upcoming Jordan-Kuwait Industrial Forum, set to begin in late April.

While the GCC has long been a key source of investment for Jordan, economic ties with the bloc have been at the forefront in recent weeks, with the UAE's deputy prime minister, Mansour Ben Zayed Al Nahyan, saying on April 17 that the GCC is "seriously" considering "bringing Jordan to the center of attention in terms of economic and development support", according to local media.

As well as bilateral and multilateral investment arrangements, efforts are also under way to mobilize support and funding for infrastructure projects in the broader MENA region. A new Arab Financing Facility for Infrastructure (AFFI), established and supported by international financial institutions and governments in the Arab world, debuted at a forum in Amman in early April. The AFFI aims to raise $1b in new money and put into place funding for the $40b that will be needed annually to fill the region's financing shortfall.

The World Bank estimates that the MENA region will need between $75b and $100b a year to sustain growth rates seen in recent years. The event focused on how the AAFI can face challenges facing governments in meeting infrastructure financing needs and what role private sector investment can play.

"Infrastructure will be a strong driver for growth in the region and indispensable for the increasingly critical water and energy deficit in many of its countries," Jafar Hassan, Jordan's minister of planning and international cooperation, told the World Bank. "Restructuring the risk-sharing mechanisms for the provision of [the] private sector and development funding for such critical development and regional infrastructure programs is a key priority in enabling governments and the private sector in advancing such projects jointly."

The stage has already been set for increasing investment. Starting in 2009, the government began reforming regulations for firms and improving the tax system. The government reduced entry costs, simplified the registration process, rationalized entry and exit regulations, improved contract enforcement procedures and enhanced electronic tax systems.

The World Bank has pointed out two medium-term challenges facing Jordan: lower private capital flows to developing countries and a lower global and regional growth outlook. While Jordan would be hard pressed to solve the last issue, it is clear that the kingdom is forging ahead with the first challenge: that of increasing foreign investment within its borders. With a flurry of meetings, deals and events, Jordan is on a path to highlight its investment offering and set itself apart from its peers. Now, international investors just need to take heed. (OBG 26.04)

Back to Table of Contents

Jordan's property sector remains stable, with minor price increases in residential sales amid the political unrest that has slowed the property market, says Asteco's latest Q1/11 Jordan report.

During the first three months of 2011, Asteco (http://www.astecoreports.com) noted continuing demand for small-and medium-sized apartments, partly due to restricted land supply in prime locations and reduced housing budgets. A move in favor of small- and mid-sized apartments instead of larger units or villas has also had an impact in this regard.

"The Jordanian government moved swiftly in adopting policy changes to protect various areas of the economy, including real estate, as political unrest impacted some countries of the Middle East. As a result, of these changes, which included limitations on price increases and the waiving of transfer fees, Jordan's property market has shown little sign of slowing," said Elaine Jones, CEO, Asteco Property Management.

The most movement was seen in areas east of the capital of Amman, with affordable housing for low-to middle-income earners showing reasonable activity in both sales and leasing transactions.

Apartment sale prices in Jordan's 4th Circle were down 1% over the quarter, at JOD 950 per square meter, with Abdoun remaining the most expensive area, with an average selling price of JOD 1,050 per square metre.

An issue also raised in the report was the end of the transfer fee-free period on property sales, which expired on 31 March 2011. At the start of April, the waiving of transfer fees for properties less than 150 square meters, and 5% fee reduction on those between 150 and 300 square meters, came to an end. Naturally it is too early to gauge the impact of this change in policy.

The report highlighted the more pro-active approach being adopted by Jordanian banks, with some approaching developers directly to offer products and services aimed at attracting more buyers and stimulating market activity. Another bank has also embarked upon a GCC road show to showcase attractive financial packages and mortgage programs to overseas investors as part of the country's new property developments.

With new developments being delivered to the office market, oversupply issues have continued from the last quarter. Across the sector, office sales eased 5% during the first three months, with rentals faring only marginally better, down 2%. The report found companies still favored leasing commercial space, rather than buying to keep overheads as low as possible amid the economic uncertainty.

Office rentals generated some new interest during the quarter, with a small number of organizations, including some local Jordanian companies along with European semi-government foundations, looking for large office units of between 500 and 1,000 square meters. With many taking considerable time before committing to tenancy contracts, intense competition has built-up between real estate companies looking to win the business. (BI-ME 26.04)

Back to Table of Contents

11.4 KUWAIT: Port Plans

Kuwait's ambition to become a leading trading center for the region took a step forward earlier in April, when the foundation stone for the new Mubarak Al Kabir port was laid, at a ceremony attended by Emir Sheikh Sabah Al Ahmed Al Jaber Al Sabah. Situated on the 530-sq-km Boubyan Island in the Gulf, close to the Iraqi port town of Umm Qasr, the new container port will significantly boost the country's handling capacity, adding 60 berths by 2033 and an expected volume of 1.8m containers per year by 2015.

Developed in five stages, the port superstructure is expected to cost $144.5m, while the wider infrastructural developments for the island could total as much as $1.1b. While these plans have been on paper for some time, the commencement of actual construction, by the Korean contracting firm, Hyundai, should build confidence in the government's ability to deliver on these ambitious plans.

These developments would help reposition Kuwait's standing in the region and enable it to better compete with other ports in the area. Kuwait is well placed to grow its cargo traffic. Situated at the head of the Arabian Gulf, the country provides a perfect entry point to the growing Iraqi market and a useful transit corridor to the rest of the peninsula.

The government, therefore, hopes to build on this demand. The forecasts largely support this optimism. According to market research by Business Monitor International, Kuwait's two main ports, Shuaiba and Shuwaikh, are both expected to experience growth in 2011. The former is expected to post growth of 3.44%, with a total throughput of 20.55m tonnes, while the latter should see traffic grow by 2.93% to a total of 9.33m tonnes this year. However, both ports are still struggling to reach their pre-downturn handling levels, with Shuaiba not forecast to hit these heights again until 2013.

To truly reach its target of becoming a logistics hub for the entire region, the country will have to work on a number of other measures to attract traffic. One of the most pressing measures will be expediting the process of moving goods through the country's various ports. This will be as much about the procedural environment as about the infrastructural capacity.

According to the World Bank's "Doing Business 2011" report, Kuwait ranked 113th, out of 183 economies for trading across borders. As the report highlights, it remains costly and time-consuming to shuttle goods through the emirate's ports. It currently takes 17 days, at a cost of $1,060, to export a container through Kuwait's ports. For imports, the figures are 19 days at a cost of $1,217. Indeed, the country scores poorly compared to others in the region, ranking a full 80 places lower than Bahrain and 95 places lower than its neighbor, Saudi Arabia.

If the government can address this issue, it may see its exports and re-exports inch steadily northwards, from the 2010 figures of $4.5b and $1.9b, according to the Central Bank of Kuwait. While much still needs to be done to bolster these figures, the Mubarak Al Kabir Port is a good start, not only because it will boost the country's port capacity, but also because of the signal of intent it sends for wider infrastructural development.

Indeed, Boubyan is simply one part of a much larger spending plan to dramatically improve the transport network in the country. The national development plan, approved by the parliament in February 2010, has earmarked $108b to help diversify the Kuwaiti economy, with spending targeted in areas such as health care, housing and transport. This should provide a timely boost to plans for the upgrade and overhaul of the country's road and rail networks. However, the most important project that falls under the plan is the expansion of Kuwait's International Airport. Currently, in the design phase, the project hopes to boost capacity from 7m passengers a year to more than 20m. The new 13m-passenger terminal is expected to be completed by 2016 with the cost estimated to be between $1.3b and $1.8b.

There has, however, been some skepticism over the ability of Kuwait to deliver on these plans. While the national development plan has been welcomed, caution remains the prevailing sentiment. As such, the breaking of ground on Mubarak Al Kabir was a significant moment for the country. Kuwait has always had the funds and the demand dynamics to meet its ambition of becoming a regional trading center. What the ceremony in April tells us is that this might now be matched by the required intent. (OBG 25.04)

Back to Table of Contents

11.5 QATAR: Developing Education

Qatar is taking definitive steps to refine its education system, increasing the focus on preparation for employment in a knowledge-based society as the government works to boost job opportunities and diversify the economy.

The Oxford Business Group reported that while Qatar has achieved significant results in lifting the standard of basic education, with literacy rates for adults aged between 15 and 24 now up to 99.8% for females and 99.4% for males, and enrolment levels at primary and secondary schools also close to 100%, more needs to be done to assist young Qataris to make the transition to either higher education or the workforce.

According to Hamda Al Sulaiti, the director of the Evaluation Institute of the Supreme Education Council (SEC), the government agency charged with directing the nation's education policy, two of the greatest challenges facing Qatar's education system are meeting the quantitative and qualitative needs of the labor market and managing the rising number of new students each year.

These challenges require continual developmental work with a stronger emphasis on the principles of educational initiative, the promotion of scientific research and its applications, and the development of professionals in the educational field, Al Sulaiti said at a meeting to discuss the implementation of the education development goals in early April.

Qatar moved a step closer to meeting those goals on March 28 when the government launched its National Development Strategy (NDS) 2011-16, the first of a series of five-year plans aimed at achieving the aims of the Qatar National Vision (QNV) 2030, the country's long-term developmental master plan. In both the NDS and the QNV, excellence in the provision of educational services is one of the overarching themes.

Under the strategy, a central goal is the development of a modern and effective education network that will ensure universal access to high-quality learning for students, starting from their entry into the system at kindergarten through to their graduation from secondary school.

Furthermore, the NDS sets out the need to create opportunities to develop talents outside the standard curriculum by opening specialized schools and maximizing the use of information and communication technology wherever possible to enhance the learning environment.

In his introduction to the NDS, Sheikh Tamim bin Hamad Al Thani, Qatar's crown prince and heir apparent, said that the strategy would work towards creating a balance between Arab culture and modernity while preserving the country's values and traditions. Investments in key sectors such as education are crucial to achieving these goals, he said.

"The national strategy deepens our commitment to increasing the well-being of all Qatari citizens and lays out a carefully designed program to continue providing the best education, health care, social protection and employment opportunities in a prosperous, stable and secure society that nurtures its members and preserves and protects family cohesion," he said. Qatar's rapid economic growth has given rise to new challenges and the NDS aims to take a more integrated approach to the development of all sectors of the economy, Sheikh Tamim said.

Among the objectives set by the NDS are to increase the number of Qataris who complete university studies and to recalibrate academic programs so that they optimize talent and capabilities.

To help achieve its targets, state agencies are to conduct studies on workforce needs and assess the gap between education output and requirements. Efforts are also under way to encourage students to take up courses that will facilitate the development of a knowledge-based economy. This is part of the NDS's policy of aligning higher education with the needs of a modern economy. The strategy also foresees further reforms to the primary and secondary education system to better prepare graduates for higher education and eliminate the need for students to take foundation courses.

To meet those objectives, Qatar unveiled its 2011/12 budget at the end of March, with education one of the major beneficiaries. The budget, which came into effect on April 1, foresees a 12% increase in outlays for education, with the total allocation for the system rising to $5.3b, up from $4.7b under the previous budget.

Though the 12% jump in expenditure on education is below the overall increase in budgetary spending, which is set to climb by 19%, the hike in the sector's allocation is higher than almost all non-capital works funds, with only state housing being given a larger rise in percentage terms.

While it will take time for the full effect of this increased funding to be felt, and for the policies set out in the NDS to have an impact, higher standards and a sharper focus for Qatar's education system should result in a streamlined learning process, and one better adapted to the needs of the nation's changing economy. (OBG 13.04)

11.6 UAE: Abu Dhabi's Classroom Upgrade

While health and safety is at the core of Abu Dhabi's initiative to close villa schools, the push will also have positive knock-on effects for the local construction sector by creating opportunities to build educational facilities to replace them.

Education has been widely discussed by policymakers as a key pillar in the emirate's economic development. Sector reforms have been significant in recent years, with steps taken including the creation of the Abu Dhabi Education Council (ADEC) in 2005 and a noticeable increase in both the budget allocation and broader government support.

Although it was introduced in 1999, the process of closing privately operated villa schools, which mostly cater to lower-income families, is still ongoing. Critics see villa schools as a blot on the educational landscape due to a lack of basic health and safety measures. Policymakers, too, worry that cramped and unsafe facilities may leave students at risk in the event of an emergency. By the same token, such premises – especially when compared to the vast majority of Abu Dhabi's schools – lack educational amenities for practical learning such as science and computer labs, sports facilities and art areas.

The number of villa schools is now down to just 50 across Abu Dhabi and Al Ain, following six closures last year. In 2011, another 13 villa schools are expected to shut and move to purpose-built facilities.

ADEC will focus its attention on school operators that have made little demonstrable effort to switch over to acceptable facilities. The regulator is set to name the schools selected for closure, which, it says, will happen in phases running until 2013.

There has been a degree of confusion regarding the timetable, however, with the owners of some schools believing they had until 2013 to shift premises. Officials, nevertheless, are keen to address this issue in phases, thereby preventing schools from stalling until the final deadline.

"There is some confusion that 2013 is the deadline," Pierre Scottorn, section manager of the private school improvement department at ADEC, told local press. "The reality is, because of the scale of the problem, it is almost unfeasible for it to happen in one given year, which is why we are trying to phase it out."

Operators complain of prohibitively expensive building costs, reaching into the millions of dollars for some larger schools. Biting further into budgets is ADEC's new school design manual, which requires buildings to meet certain criteria such as site selection, minimum dimensions, indoor air quality, acoustics and accessibility for students with disabilities.

Private school owners will also have to, depending on their curriculum, offer libraries, sports facilities, music and art rooms, computer and science labs and special education classrooms. Moreover these new buildings must score "1 Pearl", the lowest rating on the Urban Planning Council's Estidama sustainability scale.

Such high specifications translate into heavy upfront capital costs for school owners. The corollary to this, however, is that low-cost design firms and contractors should find Abu Dhabi fertile ground for projects in the education sector. After all, as government efforts to improve school buildings accelerate, it will create real demand in the market for affordable solutions that meet ADEC and Estidama requirements.

For school operators, creative building solutions are going to have to come to the fore. For instance, the use of optimal cost-space utilization – whereby functions are designed to complement classroom timetables while also being cost-efficient – is one technique that could be incorporated.

Adopting such measures means budgets can be cut by increasing the occupancy of space and, thus, reducing the number of rooms needed. End results for operators can be reduced upfront capital and operating costs because fewer rooms translate into lower energy and maintenance bills. More importantly, a smaller school also means less land will be required.

While this transition will likely mean that some school operators drop out of the market, ADEC's strategy is nevertheless logical and in line with the emirate's broader development strategy. All students must receive their lessons in a safe and suitable environment that meets their educational needs. Meanwhile, as Abu Dhabi's drive toward international best practices in education continues, it is sure to open up further investment and business opportunities going forward. (OBG 19.04)

Back to Table of Contents

11.7 SAUDI ARABIA: Focus on Food Security

While the Kingdom may be transitioning away from domestic wheat production, Saudi Arabia is stepping up efforts to ensure food security by increasing imports and investing in agricultural projects overseas.

Historically, as reviewed by the Oxford Business Group, the country heavily subsidized the cultivation of wheat. At their height in the 1970s, subsidies for this crop stood at more than $900 per tonne. During the 1990s Saudi Arabia was producing almost 4m tonnes of wheat per annum, enough to meet local demand and in some years provide a surplus for export, mainly to Eastern Europe and Syria.

However, in 2008 the government announced that it planned to phase out domestic production of the cereal, aiming to reduce output by 12.5% per year, with a goal of eliminating it entirely by 2016. This policy shift was in line with the Saudi government's increasing emphasis on water security.

Indeed, the cultivation of wheat is a particularly water-intensive process, with one tonne of wheat requiring approximately 1,000 cubic meters of water. With a growing population and an expanding industrial base, the flow of water to the agricultural sector became more and more difficult to sustain.

The government's policy of subsidizing wheat production was part of a large goal of achieving food security. Indeed, as Fahad Balghunaim, the Saudi minister of agriculture, pointed out during a recent interview with local media, food security can be realized only through a combination of domestic production and maintaining reserves of imported goods.

However, local cultivation of agricultural products – whether of wheat or otherwise – is not always possible, or economically sensible, if adequate supplies of water are not available. As Balghunaim noted, "The country's limited water supply means that local production cannot be increased substantially to meet demand."

The Kingdom has recently turned to imports to supplement its food supply. Some estimates put this year's wheat imports at around 2m tonnes, while inbound rice shipments will exceed 1m tonnes. Although some of these imports are for immediate consumption, a sizeable portion will be stored.

A report by the US Department of Agriculture, issued in early March, said that Saudi Arabia was "building up strategic stock levels for selected grains to avoid future food crisis", with planned stockpiles intended to be maintained at 50% of domestic demand. In the longer term, imports are forecast to hit 3m tonnes per year once local production winds down.

The shift to imports to meet the country's needs will require investment, however, with reports last year that the government was considering building a new port at Jeddah on the Red Sea to handle shipments of wheat, barley and other dry foodstuffs. While the existing Jeddah Islamic Port is the Kingdom's largest cargo handling facility, it is not designed to process dry bulk cargos such as grain.

In addition to encouraging an increase in imports, the government, in conjunction with privately owned Saudi companies, is also looking at the possibility of buying or leasing arable land overseas. This strategy, which has been adopted by several countries in the GCC, aims to ensure domestic food supply from foreign fields. With volatile commodity prices in recent years, securing the means of production in foreign countries is seen as a more reliable way to supply critical foodstuffs.

In January, the commerce and industry minister, Abdullah Zainal Alireza, said that the government had identified 27 countries for agricultural investment, adding that a "technical team has already visited 14 countries to explore investment prospects". Other countries are working to attract Saudi investors. During a recent visit to Saudi Arabia, Turkish Prime Minister Erdogan invited the Kingdom to invest in every sector of his country's economy, including agriculture.

Despite the increased interest in securing food supplies from abroad, these measures by no means signal the end of the domestic agricultural sector. Instead, they portend a period of transition. As Abdullah Al Rubaian, the chairman of the Saudi Agricultural Development Fund, told OBG, "The Kingdom has comparative advantages in certain agriculture products, and we are taking steps to boost these strengths. As water is a scarce resource in the Kingdom, we would like the industry to focus on less water-intensive crops and agro-industries." (OBG 25.04)

Back to Table of Contents

11.8 EGYPT: Moody's: Negative Outlook for Egyptian Banking System

On 19 April, Moody's Investors Service (http://www.moodys.com) changed the outlook for the Egyptian banking system to negative from stable. This outlook expresses Moody's expectations for the fundamental credit conditions in the Egyptian banking system over the next 12 to 18 months.

The negative outlook reflects (i) the elevated political uncertainty in Egypt following the domestic unrest, which will continue to shape the operating environment; (ii) the impact of domestic and ongoing regional turmoil on the local economy and the resulting downside risks to asset quality and profitability; (iii) the relatively high exposure of local banks to the lower-rated sovereign and the potential for even greater exposure given that banks will likely continue to finance the government's growing deficit as foreign investors are reducing their exposure to Egypt.

"Even though Egypt's ruling military regime has committed to holding democratic elections in order to meet people's demands, Moody's believes that there are still elevated risks involved in an orderly transition towards democratic rule," says Nondas Nicolaides, a VP-Senior Analyst and lead analyst for Egyptian banks based at Moody's office in Limassol.

An additional and related challenge for the banking system is the weakened macroeconomic outlook. Moody's expects a slowdown in economic growth to around 2% in the next 12-18 months given the negative impact of the recent domestic and ongoing regional unrest on tourism, foreign direct investment, incoming fund flows and private consumption. Moreover, the flight of a significant number of expatriate Egyptian workers from Libya will likely reduce incoming remittances as well as the debt-servicing ability of the affected workers. These adverse economic conditions are likely to challenge the banking system's asset quality and business prospects, as well as its profitability and internal capital-generation capacity.

"In addition, the already weak asset quality with high level of non-performing loans (NPLs) on the books of the state-owned banks is also a factor in Moody's negative outlook on the Egyptian banking system," explains Mr. Nicolaides.

Furthermore, the exposure of Egyptian banks to sovereign risk is very high (at around 26% of total assets for the banking system overall) and will likely rise further. In Moody's view, banks are likely to subscribe to an even greater proportion of the government's debt issuance that is needed to finance the country's growing deficit given that demand from non-domestic investors has dropped. Moody's cites corporate credit concentrations as another negative factor weighing down banks' creditworthiness.

Nevertheless, despite these risks and challenges, Moody's recognizes that the rated Egyptian banks continue to benefit from a robust customer deposit funding profile combined with a comfortable core liquidity position. "Indeed, the deposit base has been resilient throughout the severe political crisis in February which resulted in the closure of all banks for two weeks with minimal deposit outflows," says Mr. Nicolaides. However, the continued stability of deposits and liquidity is by no means assured, especially if Egypt does not elect an effective government in a timely manner.

Moreover, Moody's also recognizes that all five rated Egyptian banks reported positive performance in 2010. However, Moody's expects profitability to come under pressure in 2011-12, driven by increasing loan loss provisioning due to the uncertain environment and also by higher expenses that could result from the central bank's negotiations with state bank employees about wage increases.

The recent downgrades and ongoing negative outlook on Moody's ratings for Egyptian banks is consistent with the rating agency's negative system outlook and is also in line with its cautious economic outlook. Looking ahead, any downgrade of the government's Ba3 rating, the possibility of which is signaled by its negative outlook, would heavily weigh on bank ratings. (Moody's 19.04)

Back to Table of Contents

11.9 TUNISIA: Economy is a Hard Slog

The interim Tunisian government has announced a package of measures aimed at stimulating growth as the impact of the dramatic overthrow of the Ben Ali regime and of the slow process of political transition continues to weigh on the country's economic prospects. Data on the economy's performance in the first two months of the year point to a sharp slowdown in production and in the tourism sector, although exports actually increased year on year and foreign investors largely resisted any impulse to pull out.

The adoption of the emergency action plan reflects the growing concerns of the interim government, headed by Béji Caid Essebsi about the performance of the economy, particularly as Tunisia is now incurring costs arising from the political crisis in Libya as well as from its own painstaking process of adjustment. In February the government had been forecasting growth of 2-3% this year, while the 2011 budget was predicated on growth of 5.4%. However, unemployment is rising, the financial sector is weakening because of rising defaults, and the external payments deficit is growing as foreign investment declines and tourist receipts dip. The Ministry of Finance now reckons that growth is likely to be about 1% this year, with an optimistic scenario of 1.5% if tourism stages a better than expected recovery. Based on the new data that have become available and on the impact of the Libyan crisis, the Economist Intelligence Unit is revising down its growth forecast from a previous 2% to just below 1% for 2011.

Incentives

The 17-point action plan includes measures to create jobs; support firms damaged by the unrest; provide financial incentives for investment, especially in the underdeveloped interior; stimulate the financial markets; boost capital investment and support exports. Among specific measures taken, customs duties on imports of capital equipment have been halved to 6%; exporting firms have been allowed to sell half of their goods and services on the local market in 2011; firms damaged by the unrest will have their social-security payments reduced, tax payments rescheduled and debt interest subsidized. At the end of March the Banque centrale de Tunisie moved for the second time this year to boost liquidity in the economy by reducing the banks' reserve requirement by to 4.5% from 5%. The bank had already reduced the reserve requirement from 7.5% at the end of February, releasing some TD360m ($250m) for them to lend to local businesses.

Said Ayedi, the employment and training minister, said that 20,000 new public-sector jobs would be made available in July, and that another 20,000 jobs would be created in the private sector, although this may be over-optimistic given the weakness of the economy. Mr. Ayedi said that Tunisia was negotiating with its European allies to provide 4,000 jobs abroad. Additional training programs would be provided for 10,000 graduates and (in what appears to be a rather desperate measure) some 50,000 unemployed graduates would each be given TD200 to help them find jobs; the ministry had received 127,000 applications for this scheme by the end of March. Without urgent action, said Mr Ayedi, unemployment could rise from some 520,000 now (a rate of 14%) to 715,000 (almost 20%) by July. Political unrest had caused the loss of 4,000 jobs, he said, and another 80,000 jobs could be lost in the next four months if the wave of strikes, sit-ins and unrealistic pay demands did not end. At least 35,000 Tunisian workers had returned from Libya (some estimates put the figure as high as 70,000) adding to the jobless total, while another 80,000 graduates would enter the jobs market this summer.

Militant

The physical damage to business premises and stocks from social unrest in the two months from January 14th will cost business some TD400m, according to Hamadi Ben Sedrine, the head of the employers' association, UTICA. However, ongoing worker militancy is proving much more costly. A wave of wildcat strikes and sit-ins and aggressive behavior by workers in support of demands for higher wages, better conditions and the dismissal of unpopular managers have disrupted economic activity, making it even more unlikely that the jobs and higher standards of living many people expected the "revolution" can be provided in the short term. Some plants closed during the peak of the unrest have not re-opened; production at some plants that have re-opened has been disrupted by worker protests. Disruptive worker behavior virtually shut down the Menzel Bourguiba industrial zone for long periods in March. A sit-in by workers shut down production at the Italian owned industrial boot-maker JAL, which has 4,500 employees in four plants in the north-east. The textile workers' union is demanding a 10% increase in wages (employees wanted 15%) but the textile employers' association, FENATEX, says the sector cannot afford it. Workers at the Med-Oil company, part of the locally owned Poulina Group, carried out five strikes and sit-ins to that have forced the company to agree to a range of demands, including revised working hours, salary increases and re-classified job roles. However, the company has refused the demand to replace the managing director.

In the post-revolutionary chaos, the main trade union federation, UGTT, appears to have lost control of individual unions and branches and is now facing a challenge from another union, the CGTT. Employers have found it no easier to present a unified front. The employers' association, UTICA, once closely associated with the former regime, is seeking to re-invent itself under a new president, but is riven with internal quarrels.

Red ink

Industrial production in the first two months of 2011 was almost 13% lower than in the same period of 2010, according to the first batch of fresh statistics to come out since the former regime's demise. Production in the mechanical and electrical sector was down by 8%; however, textile output fell by 17% and mining output was 23% lower—both sectors being largely low-skilled and vulnerable to absenteeism caused by social unrest. Tourist numbers to the end of March were down by 43% compared with the same period of 2010, largely as a result of cancellations by European tourists. The unrest in Libya will also lead to a sharp downturn in Libyan tourists, some 2m of whom usually visit generating some 10% of tourism receipts. Trade and tourism minister Mehdi Houas said that 2011 would be "catastrophic" for tourism and that receipts might fall by as much as 50%. This is would be a serious blow to the economy because tourism not only generates some 6% of GDP and employs some 400,000 people, it is also the biggest single earner of foreign currency.

Export fillip may be short-lived

Despite the domestic downturn, foreign trade has continued to be buoyant. Exports in the first two months of the year grew by 9.3% year on year in value in current terms to TD3.7b. Exports of mechanical and electrical goods rose by 18%, though exports of textiles fell by 1.7%. Since these figures do not align with the downturn in production, it must be assumed that in both sectors a significant proportion of the exports probably came from stock or delayed accounting, rather than new production. Imports in the first two months rose by 2.6% in value in current terms to TD4.6b, as a 10% fall in equipment imports to just over TD1b was more than offset by a 34% increase in the value of energy imports as a result of soaring oil prices. Despite the continuing uncertainty, the stock market, the Bourse de Tunis, recovered some of the losses registered in January and February, when it lost over 20% of its value. The Tunindex reached 4,360.7 on April 6th, which was just 14.7% lower than at the start of the year.

Foreign firms keep faith

According to the Foreign Investment Promotion Agency (FIPA), only 33 of the 3,150 foreign companies operating in Tunisia have pulled out since the revolution, with the loss of 2,400 jobs. However, new foreign direct investment has faded, falling by 22% in the first two months of 2011 compared with the same period of 2010. The head of FIPA, Noureddine Zekri, said that the new business environment in Tunisia based on transparency, good government and anti-corruption measures will eventually cause confidence to return and lead to greater investment than ever before. For the moment, it is to be expected that foreign investors will bide their time, waiting for civil and social unrest to end and for the policies of the next government to become clear. They will want to be assured the generally investment-friendly policies of the old regime will continue, and that investment and concession deals negotiated under the old regime, especially ones that involved members of Mr. Ben Ali's family and close associates, will be honored. That still cannot be guaranteed, especially if the fragmented political landscape leads to weak governments that have to satisfy the demands of a range of competing constituencies. In that case the steady process of economic liberalization may slow down or come to a halt. (EIU 11.04)

Back to Table of Contents

11.10 TUNISIA: The Future of al-Nahda in Tunisia

On 20 April, Rajaa Basly wrote in the Carnegie Arab Reform Bulletin (http://www.carnegieendowment.org/arb) that among the many results of the "Tunisian Revolution for Dignity and Freedom," as Tunisians have taken to calling it, has been the legalization of previously banned political parties. Arguably the most influential party in Tunisia's new political scene is al-Nahda (Renaissance), which was previously not allowed to function legally due to its Islamist nature and was subject to strong repression in the late 1980s and early 1990s. Its founder Rachid Ghannouchi returned from exile in London on January 30, shortly after former President Zine Abidine Ben Ali's departure, in order to reconfigure the party for political participation on a level playing field.

The revolution cast aside previous laws and al-Nahda was officially legalized by decree of the interim government on 1 March, despite the fact that Article 8 of the constitution (which is due to be rewritten) prohibits political parties based on religion. From 1992 to 2011, al-Nahda was almost completely absent from Tunisia and it played no part in the overthrow of the authoritarian regime that had stifled any serious opposition to the ruling Constitutional Democratic Rally (RCD). The removal of the RCD left a political vacuum in a country with a young, underemployed population; 54% of Tunisians are under the age of 30, and approximately 300,000 university graduates are unemployed according to Tunisia's National Institute of Statistics.

Although this would seem to be a field ripe for al-Nahda recruitment, many Tunisians are cautious about the Islamist party. The youth who led the revolution have never known anything but single-party dictatorship under Ben Ali, and were not exposed to the ideas of al-Nahda. The Tunisian middle class is wary of al-Nahda, which has been accused of extremism and terrorism, in particular following the incidents in the early 1990s, when al-Nahda activists attacked an RCD office in a Tunis neighborhood, killing one civilian, and threw acid in the faces of certain individuals. The shock of these incidents still resonates today and Ghannouchi has recently admitted that party members committed mistakes in the past, though he stressed that those were individual acts not authorized by the party leadership.

Al-Nahda entered the new era with a flexible political discourse, seeking to turn over a new page and provide reassurance that it is committed to the values of democracy, human rights, non-violence, and the personal status code, which bans polygamy and provides for gender equality. Le Temps reported on February 6, 2011 that Ghannouchi stated that the personal status code is derived from sharia (Islamic law), polygamy has been determined to be illegal, the hijab (headscarf) is a personal choice, and stoning and amputation cannot be carried out as punishments. There are some indicators, however, that al-Nahda's stance is not so clear, including a February 17 interview in which al-Nahda spokesman Hamadi Jebali denied having aims to implement sharia law on one hand then went on to confirm the party's adherence to it during the same conversation.

Al-Nahda has joined the Committee for the Protection of the Revolution formed in response to ongoing protests, which draws together at least 28 separate organizations including the General Union of Tunisian Workers and leftist movements. This dynamic coalition has strengthened the hand of protesters who staged sit-ins in Kasbah Square in front of the prime minister's office, forcing the resignation of two cabinets viewed as too closely affiliated with the Ben Ali regime.

Al-Nahda also criticized the government formed by Beji Caid Essebsi on February 27 in response to persistent protests. Rachid Ghannouchi in particular has traded barbs with Essebsi, who held a number of prominent positions in the Ben Ali era. Ghannouchi described the 84-year-old Essebsi as having been dusted off and brought out of the archives, and Essebsi on the day of his inauguration retorted that the 70-year-old Ghannouchi was also from the archives, just a different box. Clearly, al-Nahda has chosen to side with the crowds in protesting against the remnants of the former regime, the makeup of the troubled government, its lackluster performance, and its reluctance to make bold decisions that keep pace with the momentum of the popular revolution.

In this context, the formation of the democratic transformation committees has been a topic of much debate. Three committees were formed initially of nonpartisan specialists: the Political Reform Committee, the Fact-Finding Committee for Excesses and Violations during Recent Events and the Fact-Finding Committee for Cases of Embezzlement and Corruption. Tunisia's political elite has been particularly interested in the work of the Political Reform Committee because of its role in formulating the transitional laws, including the electoral code.

The Islamists officially requested a presence on the Political Reform committee, which other groups within the Committee for the Protection of the Revolution demanded should be given executive powers. The government acquiesced and in a February 18 decree renamed it the Higher Authority for the Achievement of the Revolution Objectives, Political Reform, and Transition to Democracy, and added representatives from political parties such as al-Nahda and civil society organizations, as well as other prominent figures.

Although al-Nahda has succeeded in establishing itself within the coalition pushing to consolidate the revolution, it is still challenged by internal rifts and competition from other Islamists. Disputes surfaced as the younger generation of al-Nahda members forced founding member Abd al-Fattah Morou from the leadership body in light of demands that al-Nahda be more self-critical regarding the violence it committed in the 1991 Bab Souieka incident. Morou is now openly criticizing al-Nahda and planning to form an independent party. In addition, the official composition of al-Nahda's executive bureau has seen significant changes, including Rachid Ghannouchi's announcement from London that he was stepping aside from active leadership in favor of spokesman Hamadi Jebali.

Fragmentation is a real threat for al-Nahda; some 50 political parties have been legalized, some of which are openly Islamist in orientation and thus are potential competitors for al-Nahda's traditional constituency. Al-Nahda is also faced with unexpected emergence of a Salafi youth movement, particularly Hizb al-Tahrir, which was denied legal status by the government after it openly proclaimed its primary objective to be forming an Islamic Caliphate and abolishing political parties. This growth of fundamentalist Salafism puts al-Nahda in an awkward position and may force it to reposition itself after the Salafists have led demonstrations chanting bigoted and anti-Semitic slogans, and attacked liquor stores and unveiled women.

The question of the relationship between religion and state remains one of the core unresolved issues, and al-Nahda may have to clarify its stance on the state's secularism in the future. It has categorically rejected the separation of religion and state, but is now presenting itself as the equivalent of Turkey's Justice and Development Party, which operates in the framework of a constitutionally secular state. Tunisian identity and Article 1 of the Constitution, which says that the religion of Tunisia is Islam, are sure to be hotly contested up through the legislative elections scheduled for July 24, when the Second Republic's overall political and ideological direction will become clearer. For the first time in Tunisia's history, licensed Islamist parties will take part in elections, bringing a new dynamic into political life. Tunisians will have to balance between modernism and traditionalism so as not to fall into extremism on either end.

Rajaa Basly is secretary-general of Génération Tunisie Libre. (CARB 20.04)

Back to Table of Contents

11.11 OMAN: Smooth Sailing

Cruise ship passenger arrivals at Port Sultan Qaboos in Muscat are expected to reach a record 231,100 for the 2010/11 fiscal year ending in June – a year-on-year increase of 72%. The total number of cruise ship visits to the port is also forecast to increase to 94, up from 78 in 2009/10. Therefore, the Oxford Business Group says that Oman has become an increasingly popular cruise destination over the past few years. Passenger arrivals have risen more than fivefold since 2007, when only 44,885 cruise ship visitors docked at Muscat. "The results are very pleasing," Salem Al Mamari, the director-general of tourism promotion at the Ministry of Tourism, told local press in April. "We are seeing some welcome recognition in Oman as a preferred cruise destination."

Al Mamari emphasized that the Ministry of Tourism must pursue an intensive marketing plan to build global awareness of Oman's appeal as a destination, a strategy he hopes will bring more than 300,000 cruise passengers a year to Port Sultan Qaboos by 2015. Given the Sultanate's potential for becoming a major cruise destination, the Ministry of Tourism is seeking to attract more vessels to Omani ports. Local press reported in March that plans are also under way to base an eco-friendly cruise ship out of an Omani port.

The continued expansion of Oman Air, which now serves 24 countries, will help in making this growth possible, according to the ministry. The airline added eight new destinations in 2010, two of which are served by Airbus A330 aircraft, according to Peter Hill, the airline's CEO. Statistics from the International Air Transport Association reported a record 2.08 million arrivals to Muscat International Airport in 2010 – a 13% increase over 2009 figures.

The proportion of transit and point-to-point travellers is expected to change over the coming years, as tourism in the country increases. "In the future we should see more point-to-point travellers passing through the Muscat International Airport, as Oman becomes more popular," Hill told OBG. Several major cruise operators have added Omani ports to their tours, recognizing the increasing appeal of the Sultanate's rich history and archaeological sites. "More cruise companies are including Muscat in world itineraries, as well Salalah and Khasab as distinctive regional destinations in their own right," Al Mamari said. "The other welcome trend is the decision by a number of companies to deploy their larger vessels to our region."

The Italian firm Costa Cruises, which is the largest cruise company in Europe, sent its ship the Luminosa, with more than 2900 passengers, to Muscat and Salalah in March as part of a world tour. Stops at both ports are lined up as part of Costa's regional itineraries for 2011 and 2012. The company offers several options for shore excursions at both ports, including a tour of the souk in Muscat; a trip from Muscat to visit Jabrin Castle near Nizwa; and a trip from Salalah to Jebel Qara to visit the tomb of the prophet Job.

The British-American luxury cruise firm Cunard's Queen Elizabeth, a 294-metre-long liner with a capacity of 2068 guests, paid its first visit to Muscat in early April – a particularly significant call to port as it was part of the ship's first world tour since its launch in October 2010. Another of Cunard's ships, the Queen Mary 2, made its first visit to Salalah in May 2009 and docked in Muscat in January 2010. Port Sultan Qaboos is now a regular stop on the operator's world cruise itineraries.

Joining Costa and Cunard is Miami-based Royal Caribbean International, which recently announced the extension of its 2011/12 Middle Eastern cruise program – its third active season in the region. The itinerary of Brilliance of the Seas will include 18 round-trip seven-night cruises leaving from Dubai and stopping in Fujairah, Abu Dhabi and Muscat. Port Sultan Qaboos is also a stop in the company's new 12-night Dubai-to-India itinerary.

Oman's appeal as a day-trip location also seems to be on the rise. Many UAE-based companies are now offering day-long trips from Dubai to the northern governorate of Musandam. These tour companies offer cruises through the area's fjords on a traditional Omani dhow, including meals and the opportunity to snorkel and swim over the course of the day.

Yachting is also a growing niche area for tourism, especially along the southern coast, including Salalah, which gets significant yachting traffic as part of Red Sea cruises. Meanwhile, the government, which owns all marinas, is growing the sector in and around Muscat, where more marinas are being planned. Once there are enough marinas for yachts to sail between, the number of sailors visiting the region is likely to increase, according to Bob Locker, the marina manager at Marina Bandar in Muscat.

"Tourism has great future in Oman. Its nature is beautiful, its people friendly and open, and its heritage vast and unique," Locker told OBG. With increased air links and calls to port, the tourism sector – both along the coast and further inland – stands to benefit, along with the wider economy. (OBG22.04)

Back to Table of Contents

11.12 TURKEY: Medical Tourism Expected to Record Strong Growth

Research and Markets' (http://www.researchandmarkets.com) "Emerging Medical Tourism in Turkey" says Turkey has emerged as one of the most popular destinations in Europe for medical tourism. The country's medical tourism industry has unprecedentedly grown during the past few years. The Turkish medical tourism industry's revenue is expected to increase manifold in the coming years due to the vast potential it holds, as it is both a destination as well as a source market. It is anticipated that the number of medical tourists will rise at a CAGR of around 26% during 2010-2014, on account of rising popularity of cost effective services and the government support. The government has been readily spending on the promotional activities to boost the nation's medical tourism industry.

The Turkish medical tourism sector is expected to record strong growth in the coming years owing to a rise in investments by the private sector. As the country boasts of one of the highest number of JCI accredited hospitals and easy travel assistance, medical tourists from all over the world have started taking interest in Turkey. With very low cost of treatments and hospitals equipped with technology similar to the international standards, the number of medical tourists will rise in the coming years. To support this evidence, we have done an extensive analysis of various segments of the Turkish medical tourism market.

The baseline for the optimistic future outlook of the report is the rising number of medical tourists from the US. The number has substantially risen after the economic slowdown, which affected almost all sectors in the US; leaving a large section of population unemployed and uninsured. Hence, Turkey came out to be a good option for such patients to get their treatment done at low cost without worrying about the quality. Medical tourists from the Middle East will also pave way for the growth of Turkish medical tourism market in the coming years. (R&M 21.04)

Back to Table of Contents

11.13 GREECE: Infrastructure Report Q2 2011

Research and Markets (http://www.researchandmarkets.com) "Greece Infrastructure Report Q2 2011" says Greece's construction sector is constrained by the country's wider fiscal and economic quagmire. Although a spate of new projects were announced in early 2011, the country's ability to pull in sufficient investment, the feasibility of a number of projects (especially roads) and the sustainability of Greece's solvency continue to be questioned by investors. Although contractions in the sector are easing year-on-year, BMI expects the construction industry to shrink by 13% to €6.5b ($8.7b) in 2011, after declining by 17.6% to €7.6b ($10.1b) in 2010.

Key developments in recent months include:

The planned power plant and liquefied petroleum gas (LPG) project in the western port of Astakos was cancelled in late-October 2010. The project was priced in as an upside risk, rather than a forecasted growth in energy and utilities infrastructure industry value. However, the cancellation is a blow because the project represented the first major foreign direct investment (FDI) in Greece for several years. The cancellation highlights that in spite of the government's rhetoric on fast tracking major foreign investments, the opaqueness of government jurisdiction and political risk remain obstacles.

The collapse of the project also fuels skepticism about the government's claims that it could entice as much as €45b ($62.78b) in renewable energy investments over the next five years. The government expects renewable investment to reach €1.2b ($1.67b) in 2011, representing a sharp jump on just €400m ($558m) invested in 2009. The prime minister reiterated that he would like to see public-private partnership (PPP) models take a central role in Greece's energy sector.

The government is planning to award transport contracts worth a combined €650m ($906.81m) in 2012, including regional airport developments, the extension of the Athens ring road and the construction of two undersea road tunnels. However, concession holders and the government are looking into ways of restructuring the concession agreements for motorways which are already under construction, while the government is under increasing public pressure to address the controversial issue of toll prices. The latest developments for Greek toll roads do not bode well for government plans outlined in February 2011 to install additional toll stations along the newly built Egnatia motorway in Northern Greece to generate over €100m ($139.51m) per year.

In an embarrassing but unsurprising development in late-January 2011, Greece lost its right to host the 2013 Mediterranean Games. The International Committee of Mediterranean Games rescinded Greece's hosting rights on the back of its fiscal and economic turmoil, after the government slashed the budget for the games by two-thirds to $175m from an original $490m. The committee argued that the cuts prevented the country from preparing its infrastructure to the required standards.

With Eurozone economic recovery weaker than expected in the final quarter of 2010, BMI sees significant downside risk to the Greek construction industry's near-term return to growth of 1.2% in 2012, extending the sector's contraction by an additional year. (R&M 15.04)

Back to Table of Contents

The Fortnightly newsletter is a free service of Atid, EDI. We are a team of economic and trade development consultants, headquartered in Jerusalem, but active throughout the region and beyond. EDI works with an international clientele interested in identifying and researching business opportunities in the region. We also serve as the regional representative offices for a number of U.S. states and bilateral Chambers of Commerce.

EDI's other services include development of feasibility studies and tailored research reports, as well as identification of potential joint ventures for commercial clients. For more information on how we may better assist you, please visit our Web site at: http://www.atid-edi.com.