TOP STORIES

• El Al - American Airlines Begin Code Share Agreement
• Knesset Approves Clean Air Act
• Jordan To Launch Huge Water Project
• Economic Importance of US Military Base in Bahrain
• Egypt Has Significant Volume of Trade in Narcotics
• Moroccan Economy Would Achieve Growth Rate of 5.3% in 2009
• Bulgarian Economy to Grow 6.5% in 2008
  
  

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS - STATEMENTS

1.1 Cabinet Approves $211 Million Cut in 2008 Budget
1.2 Israeli Price Tags To Be Based On Weight - Volume

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2: ISRAEL MARKET - BUSINESS NEWS

2.1 ECI Telecom Remains India's Top Transmission Equipment Vendor for Third Consecutive Year
2.2 Road Safety Technology Co Greenroad Raises $3 Million
2.3 Lockheed Martin Delivers F-16I Flight Systems Trainer to Israeli Air Force
2.4 El Al - American Airlines Begin Code Share Agreement
2.5 LanOptics Changes its Corporate Name to EZchip Semiconductor
2.6 Ness Technologies Acquires Czech IT Services Provider Logos 2.7 ApNano Raises $5 Million

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 Halal Industry in the Middle East Tops $19.87 billion
3.2 Dubai Investor Buys Former Safari Park in Texas
3.3 LaserCard Corporation Receives Follow-on Order for Saudi Arabia National ID Card Program

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4: ISRAEL MACRO-DEVELOPMENTS

4.1 Knesset Approves Clean Air Act
4.2 Knesset Promotes Plastic Bags Bill
4.3 Negev to Get Alternative-Energy Center

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5: ARAB STATE - PAKISTANI DEVELOPMENTS

5.1 Arab Report on Unemployment Blames Foreign Workers
5.2 Central Bank of Jordan Says Economy Doing Well
5.3 Jordan To Launch Huge Water Project
5.4 Jordan Plans Regional Railway - Oil Link With Iraq
5.5 Gulf Public Spending To Exceed $300b in 2008
5.6 Foreign Investment in GCC Rockets
5.7 Kuwait Inflation Soars To 11% on High Food Prices
5.8 Kuwait to Triple Japan Investment to $48 Billion
5.9 Bahrain Inflation Steady At 3.1% in June
5.10 Bahrain-Qatar Causeway Work To Begin
5.11 Economic Importance of US Military Base in Bahrain
5.12 Abu Dhabi's First Quarter Non-Oil Exports Up By More Than Half
5.13 Oman Places Ban On Foreign Workers
5.14 Saudi Inflation Climbs to 10.6%
5.15 Egypt Has Significant Volume of Trade in Narcotics
5.16 Moroccan Economy Would Achieve Growth Rate of 5.3% in 2009
5.17 Moroccan Government Unveils 2008-2012 Strategy to Face Global Economic Situation

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6: TURKISH, CYPRIOT, GREEK - BULGARIAN DEVELOPMENTS

6.1 Turkish Foreign Trade Deficit Rises Above Expectations
6.2 Russia Becomes Turkey's Top Oil Supplier
6.3 Istanbul Rates As World's 23rd Most Expensive City
6.4 Turkey Pushes the Button For First National Tank Project
6.5 Stavrakis Projects Cyprus to Have 5% Inflation in 2008
6.6 Bulgarian Economy to Grow 6.5% in 2008
6.7 Bulgaria Approves South Stream Pipeline
6.8 Bulgaria Food and Drink Report for 2008's Third Quarter

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Tisha B'Av to Be Observed
7.2 Tu B'Av - A Day of Love

*REGIONAL:

7.3 Jordanian Olympic Participation with A Feminine Taste
7.4 Saudi Religious Police Ban Pet Cats - Dogs
7.5 Turkey's Highest Court Rejects Ban of Ruling AKP

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8: ISRAEL LIFE SCIENCE NEWS

8.1 Teva Completes Acquisition of Bentley Pharmaceuticals
8.2 Health Ministry Chooses Kamada to Develop Snakebite Antiserums in Israel
8.3 Tikcro Technologies Closes Funding into BioCancell
8.4 Frost - Sullivan Honors TransPharma Medical for its Innovative ViaDerm Drug Delivery System
8.5 Alma Lasers Receives FDA Approval for Omnifit

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9: ISRAEL PRODUCT - TECHNOLOGY NEWS

9.1 VimpelCom Chooses Mobixell Networks to Power its Multimedia - Content Services
9.2 IDO Security Announces First Sale of MagShoe in US
9.3 Emoze Push Email Now Available to Over Half a Billion Handsets Worldwide
9.4 RADVISION Video Enables Cisco Contact Center
9.5 NICE Wins an 8-digit Security Project in EMEA
9.6 Elbit Systems to Supply IDF with Thermal Imaging - Target Acquisition Systems
9.7 ER-Telecom Selects AudioCodes Residential VoIP Media Gateways
9.8 Silicom Announces “Redirector” Intelligent Networking Cards
9.9 N-trig Announces Availability of Multi-touch Gestures Software Development Kit
9.10 China Merchants Bank (CMB) to Deploy PerSay's FreeSpeech Voice Biometrics Technology
9.11 PineApp Provides Women's Care with Unparalleled Spam Blocking - Secure Email Communications

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10: ISRAEL ECONOMIC STATISTICS

10.1 Number of Israeli Jobseekers Increases
10.2 Imports of Consumer Durables Drop
10.3 Israel's First Half Tourism Up 32%
10.4 Tel Aviv is Now Even More Expensive Than New York
10.5 Israel Today Surpasses Ma'ariv in Readership

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11: In Depth

11.1 Jordan: Economy - Aid Downside
11.2 LEBANON: Another Lost Season?
11.3 LEBANON: Building on Stable Foundations
11.4 KUWAIT: Securing Water
11.5 BAHRAIN: Leveraging Cost of Living
11.6 QATAR: Hot Air
11.7 TURKEY: Fitch Says Turkey's 'BB-' Rating Tolerant to Shocks to Date
11.8 TURKEY: Prime Tourist Destination

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1: ISRAEL GOVERNMENT ACTIONS - STATEMENTS

1.1 Cabinet Approves $211 Million Cut in 2008 Budget

On 3 August, the cabinet approved a sweeping plan to cut government spending in 2008 by 6%, except for defense, education and local authorities, to free up $211m for "unbudgeted" expenditures. The new commitments resulted from several private members' bills, increased pensions for poor Holocaust survivors, a plan to hire 1,000 new policemen, salary agreements and High Court rulings. The Finance Ministry said these new commitments had created a $571m gap in the 2008 state budget. The Treasury is under pressure to stay within the budget framework of a maximum 1.7% deficit. To combat fierce opposition to the broad budget cuts from the Labor Party, Shas and other MKs, the cabinet in parallel agreed to allow the ministries to make use of a total of $89.7m from their emergency reserves. The reserve budget serves as a safety cushion to be used with the approval of the Finance Ministry and is designated to overcome problems that were not anticipated when the state budget was approved. Following initial objection to the Finance Ministry's plan, the majority of cabinet ministers voted in favor of the cuts. Treasury officials view the cuts to the base line of the 2008 budget as a success since the 6% cut will also apply to the 2009 state budget. The ministry estimated that the budget squeeze this year will save about $286m next year. (Various05.08)

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1.2 Israeli Price Tags To Be Based On Weight - Volume

On 4 August, the Knesset economic affairs committee approved new ordinances to the consumer protection law drawn up by the Ministry of Industry, Trade - Labor, which are expected to make comparison of prices easier for consumers, and protect them from unannounced reduction of quantity while maintaining the same price. The price per unit must be based on net weight, without packaging. The ordinances also address the issue of price labeling of sales and specials. Business owners are allowed to present prices per unit on sale, on the condition that the regular price per unit is also included. The new ordinances will not apply to businesses of less than 100 square meters, such as small groceries. Nor will the rules apply to wines, cigarettes, various types of unpackaged bread and makeup and cosmetics of less than one kilogram or one liter, products being sold at reduced rates due to a flaw, or whose price per unit is less than NIS 0.05. Nor will they apply to products in show windows that are sold in automatic dispensers or sold in public auctions, and single packages of varying products. (Various05.08)

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2: ISRAEL MARKET - BUSINESS NEWS

2.1 ECI Telecom Remains India's Top Transmission Equipment Vendor for Third Consecutive Year

ECI Telecom announced that Voice - Data, India's leading telecom magazine published by Cyber Media, ranked ECI Telecom as the #1 transmission equipment vendor in India for the third consecutive year. The company maintained its leadership with 30% market share, significantly ahead of other market competitors. India's domestic telecommunications segment is one of the fastest growing markets in the world, driven in large by the exponential growth rate of the country's cellular sector from which transmission vendors as ECI are particular beneficiaries. According to the Voice - Data survey, the Indian telecommunications industry grew by 24% from $18b in FY 2006-07 to $22.3b in FY 2007-08. The transmission equipment market increased by 53% to record $452m in revenues, propelled primarily from the network infrastructure expansions required to support increased cellular voice traffic. India also experienced high growth in the broadband access market, with 68% year-over-year growth. As an end-to-end network equipment provider, ECI is well-positioned to leverage its leadership in the transmission market to compete in this sector as well. ECI's 1Net business framework, as announced in March 2008, can help service providers with the inevitable transition to next-generation networks and services, through fiber to the home/building technologies, Carrier Ethernet and managed services. Petah Tikva's ECI Telecom (http://www.ecitele.com) is a global provider of networking infrastructure equipment delivering innovative communications platforms to carriers and service providers world over. ECI Telecom provides scalable broadband access, transport and data networking infrastructure which enables the foundation for the communications of tomorrow which include next-generation voice, IPTV, mobility and other business solutions. (ECI 04.08)

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2.2 Road Safety Technology Co Greenroad Raises $3 Million

GreenRoad Technologies (formerly Drive Diagnostics) has raised an additional $3m in its second financing round, which it began in January. The company has now raised a total of $17.5m in this round. Current investors Benchmark Capital, Balderton Capital Management LLP and the Virgin Green Fund participated in the round, joined by Amadeus Capital Partners. The company said it would use the proceeds from the latest round to expand its R-D and sales network. GreenRoad (http://www.greenroad.com) of Or Yehuda was founded in 2002 and employs 43 people. GreenRoad develops driver safety technologies that stop risky driving before an accident occurs. Its solutions are designed to empower drivers to manage their own safety by giving instantaneous, in-vehicle driver coaching without privacy invasions. (Globes23.07)

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2.3 Lockheed Martin Delivers F-16I Flight Systems Trainer to Israeli Air Force

Lockheed Martin Corporation has delivered the Israeli Air Force (IAF) F-16I Flight and System Trainer (FST) that will be used to support a variety of training requirements for the IAF F-16I "Soufa" fighter and ground attack aircraft. Delivery of the simulator is part of a contract originally awarded in January 2006 that calls for Lockheed Martin Simulation, Training - Support (STS) to provide emergency procedures, aircraft systems operation, and tactical and weapon systems crew training. Lockheed Martin provides the hardware and software to simulate F-16I aircraft systems, sensors, weapons and flight dynamics. The training system foundation is built from Lockheed Martin's NxSys pre-integrated suite of simulation products. That suite includes the Instructor Operator Station (NxIOS), Flight Debrief Station for After Action Review (NxAAR), Tactical Environment Simulation (NxTES), Digital Radar Landmass Simulation (NxDRLMS) Air-to-Ground and Terrain Following (TF) radar, and NxView Sensor Image Generator Software for Low Altitude Navigation and Targeting Infrared for Night (LANTIRN) forward-looking mid-wave infrared (FLIR). In addition, Lockheed Martin provides the Software Development Environment that will allow the Government of Israel to update the FST to support future training requirements. The Government of Israel separately procured the avionics simulation, cockpit and visual systems, which Lockheed Martin integrated before shipping the complete FST to Israel for installation. Lockheed Martin has a long standing relationship with the IAF, fielding the F-15I FST in 2003. That system has been in continuous operation, providing a training capability to meet Israeli Air Force. The two systems are co-located at an Israel Air Force Base providing centralized training for IAF pilots. Headquartered in Bethesda, Md., Lockheed Martin employs about 140,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. (Lockheed Martin24.07)

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2.4 El Al - American Airlines Begin Code Share Agreement

El Al and American Airlines reached a code share agreement in December 2007, including dozens of flight destinations in North America. For the first time, using one airline ticket, El Al passengers can fly comfortably and conveniently to and from a wide range of USA and Canadian destinations, via European or American airports. The shared flights will begin operating from September 2008. During the first stage, using only one ticket, passengers will be able to fly via one of El Al's direct North American destinations, or via one of El Al's European destinations, to major cities such as Chicago, Miami, Boston, San Francisco, Dallas and Washington, D.C. A few weeks later, in the second stage, the choice of destination cities will expand to include Orlando, Las Vegas, Seattle, San Diego, San Jose, Cleveland, Pittsburgh, Tampa, Denver, Honolulu, Montreal and more.

In addition, the agreement enables El Al passengers to fly between North America and Israel, with a stop (or stay) at one of El Al's key European destinations, where the transatlantic sector is flown on American Airlines. This arrangement considerably extends the flexibility of choice for passengers; in addition to the option of choosing a non-stop flight, passengers can plan to mix, say, a direct flight to one of dozens of North American destinations in one direction (with a change of plane at a USA airport), with a flight in the other direction that connects at a European airport – with layover possibilities if the passenger so chooses. The transit and connection arrangements included in the agreement guarantee passengers maximum convenience and timesaving. El Al Israel Airlines is Israel's national carrier. American Airlines (AA) is the world's largest airline in terms of passenger numbers and fleet size. (AA30.07)

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2.5 LanOptics Changes its Corporate Name to EZchip Semiconductor

LanOptics announced that it has formally changed its corporate name to EZchip Semiconductor Ltd., effective July 22, 2008. The corporate name change follows the change in the company's trading symbol to EZCH in January 2008 and the company's acquisition of substantially all of the outstanding shares of its subsidiary, EZchip Technologies. EZchip Semiconductor's shares are traded on the NASDAQ Global Market and the Tel-Aviv Stock Exchange under the symbol EZCH. Yokneam's EZchip (http://www.ezchip.com) is a fabless semiconductor company that provides Ethernet network processors. EZchip provides its customers with solutions that scale from 1-Gigabit to 100-Gigabit per second with a common architecture and software across all products. EZchip's network processors provide the flexibility and integration that enable triple-play data, voice and video services in access, metro and edge systems that make up the new Carrier Ethernet networks. (EZchip31.07)

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2.6 Ness Technologies Acquires Czech IT Services Provider Logos

Ness Technologies has signed a share purchase agreement to acquire 100% of the shares of Logos a.s., a privately-held, Czech-based leading IT services and consulting company. For the fiscal year ended March 31, 2008, Logos generated revenues of €29.7 million and was profitable. Logos has been one of the fastest growing IT services and solutions providers in the Czech Republic. With a strong presence in the Czech financial and telecom sectors, Logos provides a variety of IT services including consulting, custom software development, testing and quality assurance, information systems analysis, outsourcing and staffing. Upon completion of the acquisition, Logos will be merged into Ness Czech. Logos complements the Ness service portfolio, with little overlap in services and customers. Ness Czech's strong position in the utilities, manufacturing and public sectors will be complemented by Logos' strong presence in the financial and telecom industries. On the technology side, the combined company will offer deep expertise and experienced teams in leading technologies, including Microsoft, SAP, Oracle, Documentum and IBM. Tel Aviv's Ness Technologies (http://www.ness.com) is a global provider of end-to-end IT services and solutions designed to help clients improve competitiveness and efficiency. The Ness portfolio of solutions and services consists of software product development, including both offshore and near-shore outsourcing; system integration, application development and consulting; and software distribution. (Ness31.07)

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2.7 ApNano Raises $5 Million

ApNano Materials closed a $5m financing round from private investors at a company value of $70m after money. ApNano's NanoLub comprises of dry nanoparticles designed to replace lubricants for reducing friction. NanoLub is several times more effective than current lubricants, such as oil, and is the first commercial solid nano-lubricant in the world. The company produces NanoLub at a plant that was established three years ago when the company closed its second financing round. ApNano Materials (http://www.apnano.com) is a private company incorporated in the US in 2002. The company was granted an exclusive license by Yeda Research and Development Co. Ltd., the commercial arm of the Weizmann Institute of Science, Israel, (http://www.weizmann.ac.il) to manufacture, commercialize and sell unique nanotechnology products based on a new class of inorganic nanostructures discovered by the Institute's Nanomaterials Synthesis Group. Before the group's discovery it was thought that such particles, called fullerenes, could only be made with carbon atoms. The Weizmann group was the first to show that various inorganic compounds could also be synthesized into fullerene-like structures. The company's headquarters, sales - marketing offices are located in New York, USA. The R-D operation is located in Rehovot, Israel, in the high-tech park adjacent to the Weizmann Institute of Science. The Rehovot facility includes their semi-commercial nanoparticles production unit. (Globes 04.08)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 Halal Industry in the Middle East Tops $19.87 billion

The halal industry in the Middle East is estimated to be worth more than $19.87b in 2008, according to recent industry reports. Global players are looking to leverage the high demand for halal food products in the region, which have grown to comprise a significant part of the global halal food market, expected to reach $500b by 2010. Amidst the growing demand for halal food products in the region, Dubai has emerged as one of the first to leverage the booming prospects within the market after establishing a highly successful food processing industry, which rakes in more than $2.99b per year. Furthermore, the emirate's food processing sector is expected to rise by 11% annually, owing to its growth as the world's third largest re-exporter, with 72% of its exports being shipped to Asia, Africa and Gulf countries. (Mena 24.07)

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3.2 Dubai Investor Buys Former Safari Park in Texas

A former safari park in the middle of an active oilfield in Houston, Texas, has changed hands in a deal involving a Dubai investor, a local politician, three donkeys and a bull. Businessman Sikander Ali, of Resham Investments, who also owns the 3400 Montrose building in Houston, bought the land from Thomas Abraham, a Sugar Land City Council member who owns an air-conditioning company and invests in real estate around the Houston area. A deal for $750,000 was struck for two separate tracts totaling 64 acres south of Interstate 10 near the Brazos River. An assortment of zebras, camels, kangaroos, bears, lions, tigers, hippopotamuses and water buffalo once inhabited the land as part of the River Ridge Safari Park. Abraham sold off the exotic animals after purchasing the shuttered theme park in 2000. Ali and Abraham are now negotiating over the remaining animals - 13 horses, seven cows, three donkeys and a bull - currently living on the acquired land. It is understood that Ali plans to hold the land until the oil field runs dry, then possibly build homes on the property. Ali bought the land, but not the mineral rights, so he will be able to rake in proceeds from the oilfield, which was discovered about 10 years ago. The old safari park land is producing about 1,000 barrels of oil a month. (Various27.07)

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3.3 LaserCard Corporation Receives Follow-on Order for Saudi Arabia National ID Card Program

California's LaserCard Corporation, a leading provider of secure ID solutions, announced a follow-on purchase order valued at $2.8m to supply secure identity cards for the Kingdom of Saudi Arabia's National ID Card program. This brings the total value of orders received for the program since April 1, 2008 to $7.4m. The $2.8m order is for the continued supply of optical smart cards to be issued via offices in cities throughout Saudi Arabia. Deliveries under the order are expected to be completed during the current calendar year. The Saudi Arabia National ID card is a wallet-sized card that features LaserCard's optical memory security and a contact chip on one side, and the cardholder's picture and demographic information on the other. The optical memory adds an unsurpassed level of digital and visual security to the card. (LaserCard 05.08)

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4: ISRAEL MACRO-DEVELOPMENTS

4.1 Knesset Approves Clean Air Act

Israel's most comprehensive environmental legislation to date, the Clean Air Act, passed into law on 22 July. Three years and two months in the making, the law passed by a majority of 39 with no dissensions after intense negotiations brought the government on board. The law imposes some level of obligation for enforcement on no less than 11 ministries and will go into effect at the beginning of 2011. The bill was initially proposed in 2005 by former MK Omri Sharon (Likud) in conjunction with the Israel Union for Environmental Defense (IUED); after 20 marathon sessions in committee, the 97-clause legislation enshrines in law all aspects of reducing and preventing air pollution.

The law comes at a time when air pollution has become a serious problem in Israel. Most large cities suffer from it, especially in the Dan region. According to the IUED, one in five children there suffers from an air pollution-related illness. More than 1,100 people a year reportedly die from air pollution in the Dan region alone. Tel Aviv ranks third in Europe in air pollution, behind Bucharest and Krakow. Air pollution rates in Israel's biggest metropolis exceed the minimum standards adopted in Europe 109 days a year. Concerted, coordinated effort should be possible for the first time with the passing of the Clean Air Act. The law standardizes matters in several related areas: planning, monitoring, standards and enforcement.

The law demands that the government, led by the Environmental Protection Ministry, create a national multiyear strategy with short- and long-term goals for reducing air pollution, to be updated every five years. The plan must contain clear goals and a time line for achieving them. The law also mandates that the ministry report to the Knesset on a regular basis how well the government is implementing the act. At present, there is no national, air-quality monitoring system; instead, monitoring is conducted on a partial basis. The Act mandates a standardized national system of monitoring. The Act also empowers the environmental protection minister to set standards for acceptable pollution amounts as well as potential pollutants, such as types of gas. The minister will now have the authority to determine how much pollution factories should be allowed to emit and will issue permits accordingly. In addition, pollution from cars will also be regulated. A comparison chart ranking cars' pollution rates will also be created for public perusal.

The law rises and falls on its enforcement, of course. The new Act vastly increases both the ministry's and local authorities' enforcement capabilities. For example, the ministry can now close down any factory which exceeds pollution standards. In fact, the Act strengthens all aspects of enforcement of green laws on the part of the ministry and local authorities. Polluters could receive fines varying from NIS 100,000 to NIS 1 million and could be imprisoned for as long as two years. The law also strengthens administrative oversight of all matters concerning air pollution. (JP22.07)

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4.2 Knesset Promotes Plastic Bags Bill

On 30 July, the Knesset plenum passed the first reading of a series of new environmental laws, aimed at reducing pollution and protecting Israel's natural resources. Along with new, tougher administrative sanctions against corporate polluters, the legislature approved a new law banning stores from giving away free plastic shopping bags. The plastic bag bill prohibits stores, including supermarkets, from giving away the familiar double-handled plastic bags used to carry products home. The ban, under discussion for months, finally passed the first stage of approval, and it awaits two more readings until it is enacted as a law. Under the new bill, stores would be permitted to sell bio-degradable bags at the cash register. The ban on free bags would not apply to the smaller bags used to collect produce, which customers would be able to continue to take for free. This bag bill is a weaker version of a proposed ban on all distribution and sale of the bags. The bill also calls on the Environmental Protection Ministry to oversee that all such bags that businesses sell be biodegradable.

In addition to the law on plastic bags, the Knesset approved a new set of penalties for existing environmental laws, including a tougher schedule of sanctions against businesses and organizations found to be illegal polluters. The harsher penalties introduced under the so-called “polluter-pays” law would hit corporate polluters with administrative sanctions up to NIS 2.4 million, require polluters to pay for environmental restoration, and impose a fine equal to the economic advantage accrued by the polluter in a particular instance of violation. The polluter-pays law would also update laws, originally implemented by the British Mandate in 1936, that enforce the protection of beaches and forests. A law prohibiting the uprooting of trees, for instance, will now carry a penalty of almost NIS 50,000. (IsraelNN31.07)

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4.3 Negev to Get Alternative-Energy Center

On 4 August, the socioeconomic cabinet approved a plan by the Industry, Trade - Labor Ministry to establish a technology center for the research and development of renewable energy in the Negev at an investment of $20mn. Under the terms of the program, developed in cooperation with the Finance, Environmental Protection and National Infrastructures ministries, the R-D center will be set up in the Negev under the auspices of the Chief Scientist's Office over a period of five years. The research center will focus on the development of renewable- and alternative-energy sources for the production of electricity, such as solar and wind energy. The program is based on a research study by the Industry, Trade - Labor Ministry and the Environment Protection Ministry identifying the areas within the environment-technology sector that have the potential of boosting Israeli exports. The Trade Ministry said Israeli exports generated from renewable-energy technology were $110m in 2007. Under the framework of the inter-ministerial, five-year target plan, renewable-energy exports are foreseen to grow to $1b a year within 10 years. In addition, R-D investment is expected to increase to $350m during the 2008-2012 period of the program. (JP05.08)

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5: ARAB STATE - PAKISTANI DEVELOPMENTS

5.1 Arab Report on Unemployment Blames Foreign Workers

The first comprehensive report on labor and unemployment in the Arab world was issued by the Arab Labor Organization [ALO]. The report, extending over 570 pages, provides detailed analyses on unemployment, which has reached a crisis stage due to the constricted opportunities for employment in governments and the reluctance of young people to join in the private sector due to the incompatibility between the course of their studies and the requirements of the market. The unemployment rate in the Arab world is expected to rise to 14%. However, the Secretary-General of the Arab League noted that unemployment rates among young people reach 66% in some Arab countries. The report points out that one of the reasons for increasing unemployment is the limited opportunities open to Arab workers because of the dependence of the Arab world on foreign workers, a dependence which has become a big social and security problem in the employing countries. This is because many of these workers are demanding the rights of citizenship given their length of service in the Gulf countries and the international pressures on these countries [to be more accommodating to the foreign workers]. The report indicates that the Arab world is witnessing the highest population growth in the world with 2.4% annually, causing the population to increase to 340 million presently but projected to reach 500 million in 2025, which will place enormous pressures on the Arab economies. The report criticized the low level of intra-regional trade, which constitutes 8% of total regional trade. The situation calls for the creation of a joint Arab market, which would serve as the nucleus for intra-regional trade. The report noted that the Arab countries should increase economic growth from 3% to 7% and pump $70b into their economies to create about five million jobs a year. (al-Sharq18.07)

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5.2 Central Bank of Jordan Says Economy Doing Well

Central Bank of Jordan (CBJ) Governor Toukan announced on 22 July that a committee will be formed to issue periodic reports on the country's economic, fiscal and monetary conditions. He told journalists that the reports aim at providing accurate information on the country's economic performance, noting that citizens may be misled by unsubstantiated statements that sometimes get published without scientific analyses, studies and figures. According to Toukan, Jordan's economic performance for the first half of this year was “good, the future is promising and economic indicators are positive”. “But there is the question of inflation, in particular, which needs to be dealt with,” he said. Inflation rate for the first half of this year reached 13.31% as the consumer price index rose to 136.61 points from 120.56 points during the first half of last year, according to the Department of Statistics (DoS) figures. A study conducted by the CBJ on inflation components in the Kingdom revealed that 53% of them are imported, including oil, food and other staples. The CBJ fiscal tools can serve to contain inflation, Toukan affirmed, acknowledging that the measures taken towards this end do not provide instant solutions. At present, the CBJ reserves of foreign currencies have reached $7b, which attests to the soundness of the country's banking system, the bank's chief remarked. In reply to a question on the impact of higher interest rates to contain inflation, Toukan said this is not the only factor to tackle inflation. Last month, for example, the CBJ raised the compulsory cash reserves from 8% to 9% as a step to curb inflation, he elaborated. Also, the government has lowered the customs duties and sales tax that were imposed on several essential items and set up several parallel markets to increase competitiveness, in a bid to lower prices. (JT23.07)

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5.3 Jordan To Launch Huge Water Project

Jordan announced on 27 July that a Turkish firm will begin work next week on a near-billion-dollar project to supply the capital with water from an ancient southern aquifer. Jordanian Water Minister Abu Soud said GAMA Energy will launch the $990m plan to extract 100m cubic meters (3.5b cubic feet) of water a year from the 300,000-year-old Disi aquifer 325 kilometers (200 miles) south of Amman. Infrastructure work on the much-delayed project in the desert kingdom is expected to take around four years, the state-run Petra news agency quoted Abu Soud as saying. This will include using 250,000 tonnes of steel and digging 55 wells to pump water from Disi to Amman, where per capita daily consumption of its 2.2-million population is 160 liters (42 gallons), he said. Jordan's overall population of nearly six million is growing by almost 3.5% annually, and it is one of the world's 10 most water-impoverished countries, relying mainly on rainfall to meet its needs. The demand for water is constantly rising in Jordan, which has seen an influx of around 750,000 Iraqi refugees since the US-led liberation of its eastern neighbor in 2003. Current water consumption is some 900m cubic meters (31.5b cubic feet) per annum. The water ministry says Jordan, where 92% of the land is desert, will need 1.6b cubic meters (56b cubic feet) of water a year to meet its requirements by 2015. (JT27.07)

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5.4 Jordan Plans Regional Railway - Oil Link With Iraq

Jordan is seeking $6b from international donors to build a railway link with its neighbors and plans to import Iraqi crude oil by rail, the transport ministry said on 27 July. The railway would link Jordan's Red Sea port of Aqaba in the south with the Syrian border, through Amman and then the industrial city of Zarqa. Covering more than 1,000 kilometers, the railway would also link the Saudi and Iraqi borders with Jordan's northern city of Irbid as well as the northeastern towns of Mafraq and Azraq. The Ministry report recommended that Iraqi crude oil be carried via rail, scrapping plans to build a $260m pipeline between the two countries. Amman and Baghdad agreed last year to study the possibility of building an oil pipeline from Iraq's Haditha pumping station to Aqaba. At the end of 2004, Jordan said it would conduct a feasibility study into building a pipeline between Haditha and Jordan's sole refinery in the industrial city of Zarqa, northeast of Amman. The kingdom was entirely dependent on Iraq for its oil before the 2003 toppling of Saddam Hussein, importing 5.5m tonnes a year by road, half of it free of charge and the rest at preferential rates. In June, Iraq agreed to renew a 2006 deal to provide Jordan, which imports 95% of its energy needs, with between 10 and 30% of its daily oil requirements of around 100,000 barrels at a preferential price. (AFP28.07)

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5.5 Gulf Public Spending To Exceed $300b in 2008

Persian Gulf states will allocate about 25% more cash this year for public spending as their oil revenues cross $600b, Gulf Finance House said. Wealth in the world's biggest oil-exporting region has galloped as oil prices surged more than six-fold in as many years, giving Gulf governments windfalls to spend on economic diversification and social programs. Total government expenditures in Saudi Arabia and five other regional oil producers should hit about $300b this year, compared with an estimated $240b last year, Gulf Finance said in a research note. About $2 trillion worth of private sector projects are also under construction or planned in the oil-producing region, the Bahraini Islamic investment bank added. The combined size of Gulf states' nominal gross domestic product will surge past $1 trillion this year on an oil price windfall. The region's total crude export revenues, including Qatar's natural gas exports, will surge 65% to $660b this year, the poll of 14 economists showed. But expansionary state spending in the Gulf is one of the factors stoking inflation at record and near-record peaks, and currency pegs to the dollar in most Gulf states have constrained their ability to fight it. As the governments rake in oil revenues, meanwhile, the populations are also getting wealthier. Per-capita income in Qatar, the world's top exporter of liquefied natural gas, is forecast to surge 23% this year to $96,484 before touching $110,632 next year - second only to Luxembourg - Gulf Finance said. The IMF projects Luxembourg's per-capita income at $117,231 this year and $122,394 next year, it added. (GFH02.08)

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5.6 Foreign Investment in GCC Rockets

Foreign investment into the UAE hit a high of $19.4b in the past three years, according to latest figures from the World Bank. Capital flows into Gulf oil producers have rocketed to nearly $59bn over the past three years. Of this, the major portion went to Saudi Arabia, which received around $43.1b. Foreign direct investments (FDI) during 2005-2007 were more than eight times the FDI flow into the GCC during the previous nine years, the World Bank said. Saudi Arabia and the UAE, which have the bulk of the investments, have been locked in reforms to diversify their oil-reliant economies by opening up most of their sectors, privatizing public enterprises and expanding their industries. Their combined FDI of $62.5b surpassed the total FDI in the GCC and the whole Middle East and North Africa. The report said some countries recorded negative growth in FDI inflow. It showed that Kuwait was the main victim as it recorded higher capital outflow during the past three years, standing at around $19.1bn, which depressed the combined Gulf FDI. Qatar ranked third with FDI totaling around $10.7bn. Oman recorded relatively small FDI inflow, while Bahrain attracted around $3.9b. But there was a capital outflow of nearly $100m in 2005. The World Bank attributed the sharp rise in FDI in the GCC and some other Arab countries to reforms and high economic growth due to the surge in oil prices. (AB28.07)

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5.7 Kuwait Inflation Soars To 11% on High Food Prices

Kuwait inflation jumped to a record 11.4% in April, accelerating for a fifth straight month as high housing and food costs continued to spur price rises. April inflation advanced from 10.2% in March, government data showed on 29 July. A 14.87% year-on-year surge in housing costs in each of the two months led the inflation rise, while food costs rose 11.93% in April and 10.22% in March. Struggling to fight inflation while insulating its population from rising prices, the Kuwaiti government has raised wages of citizens twice this year, while introducing new rules on consumer lending and property trading to control prices. The Gulf state dropped its dinar currency's peg to the dollar last year in a bid to slow the rate of imported inflation since it pays for about a third of its imports in euros. But price pressures continue to plague states across the world's biggest oil-exporting region, where economies are soaring on a more than six-fold rise in oil prices since 2002. A global food crisis and high demand for properties is stoking prices across the Gulf. Inflation in Oman hit a record 13.2% in May, while in top oil exporter Saudi Arabia, prices rose at a more than 30-year peak above 10% in April. Kuwait's All Items Consumer Price Index advanced to 129.0 points on April 30 compared with 115.8 points a year earlier, the government data showed. In March, the index was at 128.30 points, up from 116.4 points a year earlier. The Gulf state's central bank tightened bank curbs on consumer lenders to control credit growth in March. (GDN30.07)

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5.8 Kuwait to Triple Japan Investment to $48 Billion

Kuwait Investment Authority (KIA), the Gulf state's sovereign wealth fund, plans to as much as triple investments in Japan to $48b, the finance minister said on 3 August. Kuwait currently invests about $15 to $16b in Japan, said Mustapha Al-Shamali, who is currently on a tour of Asia with Kuwaiti Prime Minister Sheikh Nasser Al-Mohammad Al-Sabah. The boost in investments would follow an agreement to avoid double taxation between the two countries, which would help strengthen investment flows. Both countries had agreed in principle to sign the taxation deal, he added, without saying when a final deal would be reached. The KIA was looking at investments in Japan's real estate sector and stock market, as well as other direct investments. The wealth fund is also studying how to enhance its partnerships with European firms expanding into China, including German carmaker Daimler. The KIA owns 7.6% of Daimler. KIA is also studying investment opportunities in South Korea. (KUNA03.08)

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5.9 Bahrain Inflation Steady At 3.1% in June

Annual inflation in Bahrain was steady at 3.1% in June, while month-on-month consumer prices rose 0.95% on higher housing costs, government data showed. Rising global food prices and soaring rents have spurred price rises across the Gulf, the world's top oil-exporting region, where economies are booming on a more than six-fold rise in oil prices since 2002. Price rises in Bahrain, the smallest Gulf economy, are the slowest in the region. Annual inflation has crossed 10% in Saudi Arabia, Qatar, the United Arab Emirates, Oman and Kuwait this year. The month-on-month rise in inflation - the highest this year - was due to a 1.5% in housing and utility costs, the data showed. Bahrain's consumer price index rose to 106.5 points on June 30 compared with 105.5 points at the end of May. Food prices eased for a second month in Bahrain in June, falling 6% from May, the data showed. Like most of its Gulf neighbors, Bahrain pegs its currency to the weak dollar, driving up import costs. In response to rising prices, Bahrain said in June it would spend $1.3b a year on subsidies for food and fuel to offset the impact of inflation on its population. (Reuters29.07)

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5.10 Bahrain-Qatar Causeway Work To Begin

It was announced that work on the $3b Bahrain-Qatar causeway, the world's longest man-made bridge, will start in January 2009 and will open for traffic by 2013. The conceptual designs for the Friendship Bridge will be completed in October and basic designs by the end of December. The 40 km project will include 22 km of bridges and an 18 km embankment. The 25 km Bahrain-Saudi causeway has 12 km of bridges. The go-ahead for the dream project was given following the signing of an agreement by the causeway foundation with the Qatar-Bahrain Causeway Consortium (QBCC) led by Paris-based Vinci Construction Grand Projects. The landmark agreement was signed in Manama on May 6 in the presence of Crown Prince and Deputy Supreme Commander Sheikh Salman bin Hamad Al Khalifa and Qatari Crown Prince Sheikh Tamim bin Hamad Al Thani. Besides Vinci, the consortium includes Hochtief from Germany, CCC from Athens, QDVC and Middle East Dredging Company. Work on the project is expected to start on both sides simultaneously. The bridge section will be prefabricated onshore and each bridge will be 80 m long. The expressway will be 35 m wide, with two traffic lanes and an emergency lane on each direction. Two cable-stayed bridges will be built over shipping channels, with a span length of 225 m. Another highlight of the construction is the provision for telecommunication and electricity lines. The fiber optic cables will be inside the bridge girders. (GDN02.08)

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5.11 Economic Importance of US Military Base in Bahrain

The US naval presence in Bahrain goes back to 1946 when the country was a British protectorate. According to Admiral Cosgrave, until recently the Bahrain headquartered commander of the 5th Fleet, the US naval base contributes $150m annually, or about 1.5% of Bahrain's GDP. However, this figure does not include the spending by 3,000 soldiers and naval personnel in the markets, restaurants, coffee shops, jewelry stores and gift shops, which brings the total contribution to the GDP to a much higher figure. Moreover, the families and dependents of the US personnel in Bahrain, who were withdrawn from the country in 2004 because of political tensions, may be returning. In fact, many families are given a tourist visa for two weeks to visit the kingdom. (al-Sharq20.07)

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5.12 Abu Dhabi's First Quarter Non-Oil Exports Up By More Than Half

Abu Dhabi's non-oil exports rose by 57% in the first quarter of this year, propelled by shipments of plastic and rubber, metals and audiovisual equipment, the emirate's Department of Planning and Economy (DPE) said on 26 July. The rate of growth in non-oil exports was double the growth of Abu Dhabi's imports, which was 26%. The total value of imports still dwarfed exports by 12 times, the DPE reported. Foreign trade as a whole, excluding oil and gas, grew by 27% in the first quarter to $5.9b. Saudi Arabia is the emirate's top trade partner for non-oil goods, with Japan, Germany and the US also figuring prominently. Increasing non-oil exports is a long-term goal of the Emirate, where public finances are now dominated by oil export receipts. The Government hopes the non-oil sector will account for more than half of all economic activity by 2025. (DPE26.07)

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5.13 Oman Places Ban On Foreign Workers

On 27 July, Oman announced that a number of jobs have been put off limit to foreign workers under new rules aiming to provide more employment opportunities to nationals of the Gulf Arab state which relies heavily on foreign labor. The Ministry of Manpower has begun implementing the restriction by not issuing permits for private sector companies operating businesses such as import and export and clothing to hire foreign workers. The ban does not apply to banks or oil companies. Like other Gulf Arab oil-exporting nations, non-OPEC Oman relies on foreign workers mainly from Asia and other Arab countries. According to official statistics, about 25% of Oman's total population of 2.8 million people are foreign workers. The economy ministry has allocated $714.3m in the 2008 budget as a grant to the private sector to train nationals. (Reuters27.07)

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5.14 Saudi Inflation Climbs to 10.6%

Saudi Arabia's annual inflation rose to 10.6% in June compared with 10.4% in May, as food and housing costs climbed, the official Saudi Press Agency (SPA) reported. The cost of living index for the largest Arab economy was 115.5 points on June 30 compared with 115 points at the end of May. The index was 104.4 points on June 30, 2007, according to data of the Central Department of Statistics. Food and beverage costs advanced 15.8% compared with an increase of 15.1% in the previous month, while the rental index - which includes rents, fuel and water - soared 18.7% versus 18.5% in May. (SPA03.08)

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5.15 Egypt Has Significant Volume of Trade in Narcotics

According to an official Egyptian study, the volume of local trade in narcotics reached $3.43b. The study, carried out by the Egyptian bureau of statistics, warned about the negative impact on the Egyptian economy since the expenditure on narcotics amounts to 2.5% of the national income, estimated at $137.82b. The bureau said that the amount spent on narcotics in 2007 was equal to 79.5% of Suez Canal revenues, 32.8% of Egyptian exports, 41.3% of tourism revenues and 32.7% of oil revenues. (al-Sharq al-Awsat17.07)

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5.16 Moroccan Economy Would Achieve Growth Rate of 5.3% in 2009

The Moroccan economy should achieve a growth rate of 6.2% in 2008 and 5.3% in 2009, despite global growth slowdown, the High Planning Commission (HCP) said. National economy benefited in 2008 from the consolidation of activities in the building and public works sector, processing industries, mining, tourism, telecommunications and other services, as well as improving cereal production during the 2007-2008 campaign, said the HCP in a note on the state of national economy in 2008 and growth prospects for 2009. The prospects for national economy development in 2008 and 2009 confirm the resilience of the growth of secondary and tertiary activities with respect to fluctuations in the agricultural sector, says the HCP adding that since 2004, non-agricultural activities have increased at a pace of about 5.5% per annum, while the value of the primary sector has increased by 1.3% per year. In 2008, non-agricultural activities would increase at a rate of 5.2% instead of 6.2% a year earlier, said the HCP adding that the growth of national economy would be accompanied by the control of domestic prices thanks to the expansion of expenditure on compensation which will exceed $5.5b at the end of 2008 instead of $2b initially identified in the finance bill.

According to HCP, the inflation rate, would reach 2.6% in 2009 and 3.1% in 2008 instead of 3.8% in 2007. In terms of sectoral activities, the secondary sector would achieve a growth of 5.2% instead of 6.6%, representing a slight slowdown due to the slow recovery of energy activity and moderation in the pace of growth of construction activity. The tertiary sector would generate, for its part, an increased added-value of 5.3%, while the primary sector, supported by a cereal production of 50m quintals instead of 20m recorded in 2006-2007, would achieve an added-value up 9.7% in 2008 instead of a decrease of 20% in 2007. Moroccan economy is affected by an international juncture marked by an unprecedented rise in oil products, raw materials and food products, said HCP, adding that world demand towards Morocco would be slowing down for the second year in a row. Its development pace would reach 4.1% in 2009 instead of 5.4% in 2008 and 7.6% in 2007. In 2009, non-agricultural activities would register an increase of 5.6% instead of 5.2% in 2008, while the secondary sector activities would increase by 5.9% against 5.2%. Meanwhile, the tertiary sector would increase by 5.4% against 5.3%, while the added value of the primary sector would increase, based on a cereal production of approximately 60m quintals during the 2008-2009 campaign, by nearly 3.5% instead of 9.7%. The final national consumption would achieve a volume growth of 5.5% and would contribute by 4.2% to economic growth in 2009 against 3.6% in 2008, concludes the HCP. (MAP10.07)

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5.17 Moroccan Government Unveils 2008-2012 Strategy to Face Global Economic Situation

On 22 July, the Moroccan Economy - Finance minister Mezouar in Casablanca the main aspects of the 2008-2012 strategy for socio-economic development to cope with the current global economic situation. Speaking at a conference on the current economic situation, Mezouar said despite a gloomy global economy that is characterized by soaring prices of raw materials and energy, notably oil, Morocco continues to achieve major steps forward at all levels. The North African country needs an innovator private sector to reduce the unemployment rate and poverty rate that currently stands at 21% of the total population, he said. Highlighting the economic prospects of Morocco in 2008, the minister assured the economic players that inflation will remain under control in a range of 2%, the budget deficit will be reduced to 3% of GDP and global economic growth will reach 6.8%. (MAP23.07)

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6: TURKISH, CYPRIOT, GREEK - BULGARIAN DEVELOPMENTS

6.1 Turkish Foreign Trade Deficit Rises Above Expectations

During the month of June, Turkish exports came in at $11.8 bn up by 31% y-o-y, whereas imports came in at $19.5bn, up by 36.4%. Therefore, Turkey's foreign trade deficit was $7.7 bn, an increase of 45.7% in y-o-y terms. The consensus for trade deficit was $6.8bn. Imports figure came in higher than the consensus due to fast rise in crude oil prices. Imports of crude oil and natural gas and oil products soared by 81.4% y-o-y. Total exports in the first half of the year reached $68.8 bn, while imports were $105.8 bn. Imports of investment goods increased by 11.5% in June over the same month of 2007, whereas imports of intermediary goods and consumption goods rose by 43.1% and 34.3%, respectively. Considering the foreign trade deficit in June, current account balance is expected to give a deficit of $45-46 bn in y-o-y terms. (BGC01.08)

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6.2 Russia Becomes Turkey's Top Oil Supplier

Turkey, which already depends on Russia to supply a large portion of its oil, has also become reliant on the country for natural gas. In 2007, out of a total of 23.4 million tons of crude oil imports, 9.3 million tons was provided by Russia, rendering this country Turkey's biggest oil supplier. According to data from the Ministry of Energy - National Resources and the Turkish Petroleum Refineries Corporation (TUPRAS), Iran is the second biggest oil supplier for Turkey, providing 8.9 million tons last year, followed by Saudi Arabia with 3.3 million tons. As Turkey's only refinery, TUPRAS, owned by Koc Holding, carries out Turkey's crude oil imports. Turkey meets the majority of its oil and natural gas demand through foreign markets. However, more attention is being paid to domestic production in an effort to lessen dependency on foreign oil and gas, with the Turkish Petroleum Corporation (TPAO) supplying 9% of demand. For natural gas production, this percentage is even smaller. A number of experts have noted the need for diversification of energy source countries based on strategic grounds. To achieve this, oil import and trade was liberalized in January 2005, and licensed companies were allowed under the new arrangement to import from any supplier. TUPRAS, which reduced the amount of oil purchased from Libya in the last two years, sought to fill the gap in supply this created by importing more from Russia. A similar scenario has been observed in imports of natural gas. The growing need for natural gas is being met by Russia after Iran proved unreliable by restricting gas flow more than once during past winters. The state-owned Turkish Pipeline Corporation (BOTAS) makes natural gas purchases mainly from Russia. Last year, 36.4 billion cubic meters of natural gas was imported to meet domestic demand. Of this amount, 23.1 billion cubic meters came from Russia and 6.1 billion from Iran. The remaining 7.2 billion cubic meters was procured from Azerbaijan, Algeria and Nigeria. (Zaman30.07)

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6.3 Istanbul Rates As World's 23rd Most Expensive City

Istanbul has been ranked the world's 23rd most expensive city in a recent survey performed by international human resources and financial consulting firm Mercer. The 2008 Cost of Living Survey by Mercer covers 143 cities across six continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment. It is the world's most comprehensive cost of living survey and is used to help multinational companies and governments determine compensation allowances for their expatriate employees. Istanbul had placed 38th in the same survey last year. Mercer Turkey noted that living in Turkey is becoming more expensive as is typically observed in developing countries with rapidly growing economies that are combating inflation. In addition, the overvaluation of the lira against the dollar, especially in the last four years, has contributed to a relative increase in prices. (Zaman25.07)

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6.4 Turkey Pushes the Button For First National Tank Project

The Undersecretariat for the Defense Industry (SSM) has launched Turkey's first national tank manufacturing project, carried out in cooperation with Koc Holding's Otokar and the South Korean Defense Ministry. Under the project, Otokar will build modern tanks using only Turkey's resources. Turkey's Aselsan, the Turkish Mechanical and Chemical Industry Corporation (MKEK), Roketsan and South Korea's Hyundai Rotem will be participating in the project as subcontractors. Prime Minister Erdogan, Koc Holding CEO Koc, South Korean Defense Minister Lee, ministers and senior managers of the collaborating companies got together on 29 July at the Otokar plant in Sakarya for a signing ceremony. Turkey's first combat tank produced completely in the country, Altay, will be completed in 78.5 months. However, Erdogan requested to make the effort to shorten the time period for the tank's completion. The prime minister underlined that Turkey plans to manufacture 50% of the Turkish Armed Forces' (TSK) artillery needs itself by 2011. South Korea is providing technological support for the tank. (Zaman30.07)

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6.5 Stavrakis Projects Cyprus to Have 5% Inflation in 2008

Inflation in Cyprus will accelerate this year to 5%, higher that the government's previous forecast, fuelled by higher oil and food prices, Finance Minister Stavrakis said. Inflation averaged 4.6% in the first half of the year driven by a near total dependence on oil imports and a greater weighting of foods in the price index. It hit a five year high of 5.47% last month and national inflation was 2.4% in 2007. The 5% forecast is 1.4% higher than the EU average. The minister said about 60% of inflation was due to exogenous factors and only 25% spurred by demand. Cyprus imports about 95% of its fuel, compared with an average of 60% for the other 26 European Union countries. Soaring consumer prices prompted the European Central Bank to raise its key interest rate to a seven-year high of 4.25% this month. Crude prices have almost doubled in the past year, pushing the euro-area inflation rate to the highest in more than 16 years in June. Economic growth will ease to 3.7% from 4.4% in 2007, as the global slowdown hurts the island's financial services and construction industries. Growth will slow as a weaker pound sterling and falling house prices in the UK hurt travel and investment in Cyprus. Increased government costs to import water to the drought-stricken island will also hurt finances. Slower growth will reduce revenue and shrink the budget surplus to between 0.1% and 0.6% of GDP, from 3.3% last year.

The island's economic growth projections for 2008 were unchanged at 3.7% from 4.4% in 2007. Unemployment will remain 3.9%. The public debt will drop to 48.5% in 2008 – 11.4% less than the previous year. The minister said key to Cyprus' economic well-being is to boost productivity while transforming the island into a regional service centre with emphasis on Russia, Ukraine and emerging markets including China and India. Improving government finances is a top priority for the ministry and Stavrakis has proved this by phoning up the banks to get a better deal for money deposited from the social insurance fund. He secured a better rate of 6% for those deposits that were only fetching interest of 4.75%. (Cyprus Weekly 18.07)

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6.6 Bulgarian Economy to Grow 6.5% in 2008

The Bulgarian economy is going to grow 6% in 2008 and 6.5% in 2009, according to the Quarterly Forecast on the Eastern EU Member States of the International Center for Economic Growth. According to the data of Bulgaria's National Statistical Institute, the country's growth in 2007 was 6.5%. The ICEG forecast points to the fact that in the second quarter of 2008, Bulgaria's exports grew by 9.2% compared to 5.8% growth for the imports. It also predicts that Bulgaria's inflation in 2008 will be 11.5% and 7.7% in 2009. The risk factors for the Bulgarian economy according to the ICEG are rising oil prices, the unstable international financial markets and the economic slowdown in the EU. ICEG European Center is an independent economic research institute based in Budapest, focusing its activities on research, macroeconomic and sectoral analyses and forecasts. (TSW26.07)

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6.7 Bulgaria Approves South Stream Pipeline

On 25 July, an overwhelming majority of Bulgarian lawmakers passed legislation to move forward on construction of the South Stream gas pipeline. By a vote of 140 to 47, with two abstentions, the Bulgarian Parliament ratified the deal to construct a pipeline that will transport natural gas from Russia to southern Europe. South Stream is a rival pipeline to the Nabucco pipeline, which is planned to reach from Turkey to Austria via Bulgaria. The European Union and the United States back Nabucco as a means to ease Europe's dependence on Russian energy. Russian energy giant Gazprom will form a 50-50 joint venture with the state-owned Bulgargaz to construct and manage the pipeline in Bulgaria. South Stream will have a maximum transport capacity of 1.1 trillion cubic feet of natural gas per year. Russia said it would maintain full capacity for the pipeline once construction is completed. (SNA25.07)

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6.8 Bulgaria Food and Drink Report for 2008's Third Quarter

Research and Markets announced the addition of the "Bulgaria Food and Drink Report Q3 2008" report to their offering. This Bulgarian Food and Drink Report provides independent forecasts and competitive intelligence on Bulgaria's food and drink industry. This Report for Q3/08 places Bulgaria in a modest eighth place within the 14 food and drinks markets in Central and Eastern Europe (CEE). The country has benefited tremendously from the lead up to its European Union (EU) accession, both in terms of financial aid and closer economic integration, which has boosted its food and drink and agricultural industries. Food consumption, alcohol and tobacco sales have all increased in recent years, despite the fact that the population is gradually decreasing. This trend shows the opportunities that exist for food and drink manufacturers, as consumers are increasingly interested in new food trends and prepared to pay more for premium products at the expense of cheaper commodity items.

Foreign companies are recognizing such opportunities. To this end, in April 2008, Carlsberg Bulgaria announced that it will boost the monthly output capacity by 40,000 hectoliters (hl), as part of its longer-term aim to modernize its regional production facilities. The Bulgarian upgrade – of the Blagoevgrad facility, which produces Pirinsko Pivo – is expected to be completed shortly, further improving the 12% rise in beer sales in January and February 2008. In the meantime, its Danish parent company Carlsberg has added energy drink Battery to its Bulgarian portfolio, in response to rising demand for such beverages. Domestic companies are also becoming more aggressive in terms of their expansion strategies. In March 2008, local brewer Boliarka announced that it will start exporting its beer to the US. The company currently exports around 6% of its annual output, with most of its destined for Romania. EU integration has increased export opportunities not only because of better trade links, higher exposure to Bulgarian products and tourism, but also due to the rising number of Bulgarian expatriates living elsewhere in Europe.

In the food industry, in December 2007, French poultry processing company Duc created a joint venture (JV) with Bulgarian poultry producer SVS 98, in which it will hold a 40% stake. The JV will market top-grade fresh chicken in Bulgaria, targeting rising disposable incomes and a shift towards consumer preference for quality and premium foodstuffs. The market is likely to continue experiencing such dynamism, despite current spending on food and drink being low in regional terms, as economic conditions improve. (25.07)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Tisha B'Av to Be Observed

This coming 9/10 August, Tisha B'Av, the Fast of the Ninth of Av, will be observed in Israel and around the world. It is a day of mourning to commemorate the many tragedies that have befallen the Jewish people, many of which coincidentally have occurred on the ninth of Av. Tisha B'Av means "the ninth (day) of Av." Tisha B'Av primarily commemorates the destruction of the first and second Temples, both of which were destroyed on the ninth of Av (the first by the Babylonians in 586 B.C.E.; the second by the Romans in 70 C.E.). Although this holiday is primarily meant to commemorate the destruction of the Temple, it is appropriate to consider on this day the many other tragedies of the Jewish people, many of which occurred on this day, most notably the expulsion of the Jews from Spain in 1492.

Tisha B'Av is the culmination of a three week period of increasing mourning, beginning with the fast of the 17th of Tammuz, which commemorates the first breach in the walls of Jerusalem, before the First Temple was destroyed. During this three week period, weddings and other parties are not permitted, and people refrain from cutting their hair. From the first to the ninth of Av, it is customary to refrain from eating meat or drinking wine (except on the Sabbath) and from wearing new clothing.

The restrictions on Tisha B'Av are similar to those on Yom Kippur: to refrain from eating and drinking (even water), washing, bathing, shaving or wearing cosmetics, wearing leather shoes and engaging in sexual relations. There is also a prohibition to refrain from studying Torah, save for those sections relating to Jerusalem's destruction. Work in the ordinary sense of the word is also restricted. People who are ill need not fast on this day. Many of the traditional mourning practices are observed: people refrain from smiles, laughter and idle conversation, and sit on low stools. In synagogue, the book of Lamentations is read and mourning prayers are recited. The ark (cabinet where the Torah is kept) is draped in black.

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7.2 Tu B'Av - A Day of Love

Tu B'Av, the 15th Day of Av (which falls this year on 16 August) is both an ancient and modern Jewish holiday. Originally a post-biblical day of joy, it served as a matchmaking day for unmarried women in the second Temple period (before the fall of Jerusalem in 70 C.E.). Tu B'Av was almost unnoticed in the Jewish calendar for many centuries but it has been rejuvenated in recent decades, especially in the modern state of Israel. In its modern incarnation it is gradually becoming a Hebrew-Jewish Day of Love, slightly resembling Valentine's Day in English-speaking countries. The first mention of this date is in the Mishna, (compiled and edited in the end of the second century), where Rabban Shimon ben Gamliel is quoted saying, "There were no better (i.e. happier) days for the people of Israel than the Fifteenth of Av and Yom Kippur, since on these days the daughters of Israel/Jerusalem go out dressed in white and dance in the vineyards. What were they saying: Young man, consider whom you choose (to be your wife)…"

For almost 19 centuries- between the destruction of Jerusalem and the re-establishment of Jewish independence in the state of Israel in 1948 - the only commemoration of Tu B'Av was that the morning prayer service did not include the penitence prayer. In recent decades Israeli civil culture promotes festivals of singing and dancing on the night of Tu B'Av. The entertainment and beauty industries work overtime on this date. It has no formal legal status as a holiday; it is a regular workday, nor has the Israeli rabbinate initiated any addition to the liturgy or called for the introduction of any ancient religious practices. The cultural gap between Israeli secular society and the Orthodox rabbinate makes it unlikely that these two will find a common denominator in the celebration of this ancient/modern holiday in the foreseeable future.

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*REGIONAL:

7.3 Jordanian Olympic Participation with A Feminine Taste

Woman athletes took hold of Jordan's participation in the Olympic Games to be held in Beijing during Aug.8-24. The Jordanian delegation is headed by Lana Jagbeer, the first Jordanian woman ever to lead an Olympic delegation. Zeina Shaban (table tennis player) will raise the flag of Jordan at the opening ceremony to be the second Jordanian women raising the flag after HRH princess Haya Bint Al-Hussein at Sydney Olympics of 2000. Women dominance in the Olympics comes through the participation of four athletes Nadeen Dwani (taekwondo player), Zeina Shaban (tennis player) Razan Fareed (swimming), and runner Bara' Marwan, compared with three men Anas Hamoudeh (swimming), Ibrahim Bisharat (equestrian) and athlete Khalil Hanahneh. Jordanian Olympic delegations in the past were only concerned about participation not competition, thus making Jordanians' interaction with the Olympics less enthusiastic. But this year the delegation abandoned the idea of mere participation and adopted the slogan of Competition hoping to lead to the platform crown. (Petra02.08)

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7.4 Saudi Religious Police Ban Pet Cats - Dogs

Saudi Arabia's religious police have announced a ban on selling cats and dogs as pets, or walking them in public in the Saudi capital, because of men using them as a means of making passes at women, an official announced on 30 July. The head of the Commission for the Promotion of Virtue and the Prevention of Vice in Riyadh, known as the Muttawa, told the Saudi press that the commission has started enforcing an old religious edict. He said the commission was implementing a decision taken a month ago by the acting governor of the capital, Prince Sattam bin Abdul Aziz, adding that it follows an old edict issued by the supreme council of Saudi scholars. The reason behind reinforcing the edict now was a rising fashion among some men using pets in public "to make passes on women and disturb families," he said, without giving more details. Othman said that the commission has instructed its offices in the capital to tell pet shops "to stop selling cats and dogs". The 5,000-strong religious police oversees the adherence to Wahabism - a strict version of Sunni Islam, which also forces women to cover from head to toe when in public, and bans them from driving. (AFP30.07)

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7.5 Turkey's Highest Court Rejects Ban of Ruling AKP

Turkey's highest court has ruled against a proposed ban of the governing AKP party. A wafer-thin majority of the 11 judges decided to give the government a reprieve, while handing down a warning. The decision by Turkey's highest court on 30 July avoided plunging Turkey into a political crisis. The Constitutional Court in Ankara instead handed down a warning to the governing party. The presiding judge Hasim Kilic said after three days of deliberations those against the ban had narrowly won out. Six of the 11 judges had wanted to ban the AKP for allegedly trying to steer the country toward Islamic rule. The ban would have required the votes of seven justices. The court did, however, decide to strip the party of half of its state funding. The decision is a reprieve for Prime Minister Erdogan and his allies in the Islamic-rooted AKP. A ban would have triggered even more political turmoil in the country and would also have severely damaged Turkey's image as a democracy as the country seeks to join the European Union. The court case was the latest battleground in the power struggle between pious Muslims and the secular establishment. Tensions had increased after the AKP attempted to overturn a ban on the wearing of headscarves in universities, a law that was then overturned by the Constitutional Court. Prosecutors are currently preparing a case against a number of people, including former generals, accused of plotting to overthrow the government. The AKP, while socially conservative, has embraced many aspects of Western political and economic system and has steered the country towards many reforms. This combination had proved popular, with the party winning 47% in the general election last year. (Der Spiegel 30.07)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 Teva Completes Acquisition of Bentley Pharmaceuticals

Teva Pharmaceutical Industries has completed its acquisition of Bentley Pharmaceuticals, which will operate in Spain under the Teva name. At closing, Bentley consisted solely of its generic pharmaceutical operations, following the spin-off of its drug delivery business to its stockholders on June 30, 2008. The aggregate purchase price paid by Teva was approximately $360m in cash, or approximately $14.82 per Bentley share. As one of the fastest growing markets in Europe, Spain was identified as a target market in the Company's 5-year strategic plan. This acquisition is expected to provide Teva with a platform to capture a leading position in the Spanish generics market. As previously announced, Teva expects that the acquisition will become accretive within 12 months of closing. Teva initially established a presence in Spain in 2004. Since then, TEVA Genericos Espanola, S.L. has introduced more than 60 products targeted both to hospitals and pharmacies. Teva is currently the fourth largest generic company in Spain in the hospital market. Teva, through the combination of its existing operations in Spain and Bentley's operations, will offer the Spanish market over 170 products (in approximately 465 presentations) and will have over 45 products pending generic product registrations. Teva Pharmaceutical Industries (http://www.tevapharm.com), headquartered in Israel, is among the top 20 pharmaceutical companies in the world and is the leading generic pharmaceutical company. The company develops, manufactures and markets generic and innovative pharmaceuticals and active pharmaceutical ingredients. (Teva23.07)

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8.2 Health Ministry Chooses Kamada to Develop Snakebite Antiserums in Israel

Kamada announced that the Israeli Ministry of Health elected Kamada to be the exclusive developer and manufacturer of snakebite antiserums in Israel. The Israeli Ministry of Health will finance the entire project, including the development, planning and production of the snakebite antiserum and the establishment of an antiserum manufacturing facility. The estimated cost is $5m, which will be paid in installments to the Company throughout the duration of the agreement. The project is subject to the signature of a final agreement and is estimated to be completed within two years. After the completion of the project, Kamada will manufacture the antiserum for the Ministry of Health on an ongoing basis. Prior to signing a final agreement, Kamada will begin the first stages of development against an advance payment that will be transferred to the Company by the Ministry of Health. Kamada (http://www.kamada.com) is a public biopharmaceutical company that specializes in developing, producing and marketing a line of specialty life-saving therapeutics, using its proprietary chromatographic purification technologies. Several of these specialty therapeutics are licensed and marketed in more than 15 countries, others are currently undergoing advanced clinical trials. (Kamada31.07)

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8.3 Tikcro Technologies Closes Funding into BioCancell

Tikcro Technologies announced the closing of the agreement to provide BioCancell Therapeutics with $2.5m in funding to continue clinical trials of its drugs for the treatment of superficial bladder carcinoma, ovarian and pancreatic cancers. BioCancell's clinical trials with its leading drug BC-819 include: Superficial bladder carcinoma cancer - commenced Phase IIb trial in 7 centers in Israel and in the U.S. of intermediate-risk superficial bladder cancer, Pancreatic cancer - preparing for a multi center Phase I/IIa clinical trial for the treatment of pancreatic cancer, and a trial is expected at the Massey Cancer Center of Virginia Commonwealth University in the U.S. and at the Tel Hashomer Sheba Medical Center in Israel. Tikcro now holds approximately 6% of the outstanding capital stock of BioCancell. If the notes are converted in full, Tikcro will hold an aggregate of approximately 24% of BioCancell's outstanding capital. Jerusalem's BioCancell Therapeutics (http://www.biocancell.com) is a biotechnology company specializing in the development of Patient-Oriented, Targeted Therapy for the treatment of a wide range of cancers. Its therapeutic and diagnostic technology constitutes a novel ‘search and destroy' paradigm for the targeted destruction of cancer cells – with no effect on surrounding tissue and no observed side effects – for long-term, safe treatment and prevention of cancer. Tel Aviv's Tikcro (http://www.tikcro.com) identifies potential technologies with a view to acquiring stakes in, and directing the development of, one or more operating companies in the technology area. (Tikcro31.07)

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8.4 Frost - Sullivan Honors TransPharma Medical for its Innovative ViaDerm Drug Delivery System

The 2008 Frost - Sullivan European Transdermal Drug Delivery Product Innovation Award is conferred on Israel-based TransPharma Medical in recognition of its innovative ViaDerm drug delivery system. The company's two flagship drug product development programs - ViaDerm hPTH (1-34) for the treatment of osteoporosis and ViaDerm-hGH for the treatment of human growth hormone deficiency – both in phase 2 of clinical development. The unique ViaDerm system solution allows for low-cost, patient-friendly transdermal delivery of a wide variety of drugs from a patch. Suitable for home use, the ViaDerm system employs a re-usable battery-operated handheld electronic device in combination with a patch containing the drug. The RF-MicroChannels are large enough to enable the delivery of high molecular weight molecules and are open up to 24 hours, thus allowing prolonged systemic delivery of a wide range of drug molecules, including biologics, which are currently available primarily by injection. The ViaDerm system offers patients an administration method that avoids the need for injections, thereby increasing compliance and safety.

The Frost - Sullivan Award for Product Innovation is presented to the company that has demonstrated excellence in new products and technologies within their industry. The recipient company has shown innovation by launching a broad line of emerging products and technologies. Established in 2000, TransPharma Medical (http://www.transpharma-medical.com) is a specialty pharmaceutical company focused on the development and commercialization of drug products utilizing a proprietary active transdermal drug delivery technology. TransPharma aims to develop multiple drug products through strategic partnerships with leading pharmaceutical companies and through independent product development. For more information, visit the Company's website at. (F-S02.08)

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8.5 Alma Lasers Receives FDA Approval for Omnifit

Alma Lasers announced that it has received clearance from the U.S. FDA to market its handheld skin resurfacing device, Pixel CO2 Omnifit. The device is a carbon dioxide-based laser that can resurface skin, remove wrinkles, shrink pores or fill in acne scars by exposing the skin to a laser-guided beam. Alma Lasers says its device can deliver improved results quicker than existing devices, with a faster recovery time. The product is a handle that can be attached to a CO2 laser resurfacing device made by either Alma Lasers or other companies. The company believes that treatment centers interested in upgrading their laser equipment will prefer to purchase its attachment rather than buy an entire new device. The process for obtaining FDA approval for aesthetic devices is less stringent than that for other medical devices. Caesarea's Alma Lasers (http://www.almalasers.com) is a global developer, manufacturer and provider of laser, light-based and radiofrequency devices for aesthetic and medical applications. Alma Lasers' expertise lies in the winning combination of an ability to innovate bringing unique new technologies to the global aesthetic market, balanced by a strategic depth of clinical knowledge and industry experience. (Globes04.08)

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9: ISRAEL PRODUCT - TECHNOLOGY NEWS

9.1 VimpelCom Chooses Mobixell Networks to Power its Multimedia - Content Services

Mobixell Networks announced that VimpelCom, a leading mobile operator in Russia and the CIS region, has selected Mobixell's solution to power the operator's multimedia content services and provide a centralized solution to ensure an optimal user experience irrespective of the device or network used. Mobixell's mobile multimedia adaptation solutions provide automated, optimized content production for off-line, on-line and time sensitive environments including content download, browsing the operator's portal and A2P MMS push services. The Mobixell solutions covers the mobile content production flow, generating better time to market, increasing the amount of mobile content offered to end users, and ensuring the high quality of content. Ra'anana, Israel's Mobixell Networks (http://www.mobixell.com) provides innovative multimedia and advertising solutions to mobile operators and content providers. Mobixell's solutions focus on enhancing the user experience to increase adoption, encourage customer loyalty and build on the operators' assets to introduce new revenue streams. (Mobixell23.07)

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9.2 IDO Security Announces First Sale of MagShoe in US

IDO Security announced its first customer in the US through its regional distribution partner, Bryant Integrated Technologies. The customer is one of the world's largest commercial cruise lines, which will use MagShoe on its ships to significantly reduce passenger waiting lines while improving security - especially in high-pressure situations like re-boarding from a port of call in time for departure. MagShoe addresses a key vulnerability in walkthrough metal detectors and other screening technologies, which stop just above the ankles when scanning for concealed weapons. The portable, user-friendly device extends metal detection to include the lower extremities, covering everything from four inches above the ankles to the bottoms of the feet - without requiring passengers to remove their shoes, thanks to a patented "step-in" design.

Headquartered in New York with a subsidiary in Rishon LeZion, Israel, IDO Security (http://www.idosecurityinc.com) designs, develops and markets the patented MagShoe weapons metal detection system. MagShoe fills a critical void in today's metal detectors by extending screening to the lower body and feet. MagShoe's "shoes-on" design maximizes security, thoroughness and accuracy while eliminating the need to remove shoes for increased convenience and safety. (IDO23.07)

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9.3 Emoze Push Email Now Available to Over Half a Billion Handsets Worldwide

Hundreds of millions of mobile phone owners can now take advantage of email on-the-move as emoze launches the world's first push mobile email solution for Java handsets. Push-mobile email is now available to a whole new category of mobile users, with more than 800 handsets added to the mobile email mix. Standard-grade handsets previously considered 'dumber' than Blackberry handsets, Smartphones or Windows Mobile devices, can get very smart with emoze. Sony Ericsson, Nokia, Motorola and Samsung users will be able to get emoze push mail on their handsets. The deployment will be in stages; Nokia Series40 handsets will be the first to be added, followed shortly after by the rest. Unique web-like graphics, flexible layouts and animated screen transitions are all supported by the emoze Java client. Unlike other simple push email solutions, emoze delivers slick, colorful and well laid out messaging and content - mirroring what you get on your PC screen - to even the most basic mobile phone.

Ra'anana, Israel's emoze (http://www.emoze.com) turns mobile phones and mobile devices in to fully functional personal communication devices with a single, simple and free download for the individual user. It delivers real-time, secure synchronization of emails, calendars, contacts and tasks - pushing data and updates to you anytime, anywhere using any mobile service provider network or WiFi and all leading brands of mobile device. Download, registration and use of emoze are all free for the individual user. Users need a data package from their mobile service provider. (emoze 23.07)

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9.4 RADVISION Video Enables Cisco Contact Center

RADVISION announced that it is providing integrated video communications for Cisco's Unified Customer Voice Portal (CVP). Cisco's solution will now leverage the SCOPIA Interactive Video Platform's extensive video communications capabilities. The SCOPIA Interactive Video Platform (IVP) is a universal video media server platform providing powerful processing building blocks, ubiquitous device connectivity and enabling the easy creation of a wide range of video-related applications and services. The video integrated Cisco CVP solution utilizes RADVISION's iCONTACT, a unique contact center video-enabling software component running in conjunction with the SCOPIA Interactive Video Platform. Together, the SCOPIA IVP and iCONTACT offer a comprehensive solution that enables systems integrators and contact center equipment vendors to develop and deploy visual communications services to contact centers. Tel Aviv's RADVISION (http://www.radvision.com) is the industry's leading provider of market-proven products and technologies for unified visual communications over IP, 3G and IMS networks. With its complete set of standards-based video networking infrastructure and developer toolkits for voice, video, data and wireless communications, RADVISION is driving the unified communications evolution by combining the power of video, voice, data and wireless – for high definition video conferencing systems, innovative converged mobile services, and highly scalable video-enabled desktop platforms on IP, 3G and emerging next-generation IMS networks. (RADVISION29.07)

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9.5 NICE Wins an 8-digit Security Project in EMEA

NICE Systems won an 8-digit deal from an EMEA law enforcement agency that will utilize the NICE solutions for enhanced citizen safety and security. The company has already received an order at over $7 million, which constitutes half of the total deal. This win is a result of NICE's strategic focus on large scale security deals, and represents one of many opportunities. NICE offers a unified set of solutions for the collection and analysis of both telephony and Internet data for law enforcement, intelligence and internal security organizations. The solution provides a complete suite of operational tools and applications, which ensure that meaningful, mission-critical information is delivered to security decision makers and operational staff, enabling them to detect threats and achieve a fast and appropriate response. Ra'anana's NICE Systems (http://www.nice.com) is the leading provider of Insight from Interactions solutions and value-added services, powered by the convergence of advanced analytics of unstructured multimedia content and transactional data - from telephony, web, email, radio, video, and other data sources. NICE's solutions address the needs of the enterprise and security markets, enabling organizations to operate in an insightful and proactive manner, and take immediate action to improve business and operational performance and ensure safety and security. (NICE 29.07)

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9.6 Elbit Systems to Supply IDF with Thermal Imaging - Target Acquisition Systems

Elbit Systems announced that its wholly-owned subsidiary, Elbit Systems Electro-Optics Elop was selected by the Israeli Defense Forces as the supplier of Mars - an innovative thermal imaging and target acquisition system. MARS is a hand-held next-generation thermal imager that operates using un-cooled sensor technology. In addition, the system combines a laser range-finder, GPS, compass, day channel and recording system. MARS is especially suited for the individual soldier, infantry forces and special units due to its advanced observation and target acquisition capabilities, its light weight and low power consumption. Haifa's Elbit Systems (http://www.elbit.co.il) is an international defense electronics company engaged in a wide range of defense-relat