Fortnightly - February 27, 2013

 

EDI Fortnightly Report

TOP STORIES

 

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1  Steinitz Claims Victory Over Barak & IDF “Black Hole”
1.2  Israel's Banks Driven to Minimal Fee Reductions

2:  ISRAEL MARKET & BUSINESS NEWS

2.1  Germany's Adva Optical Acquires Biran High Tech Advisors 
2.2  Atlantium Raises $9 Million 
2.3  Intel Israel Exports Doubled In 2012 to $4.6 Billion 
2.4  Pongr Picks Up Israeli Startup Sightec 
2.5  NanoH2O Awarded Order for Expansion of Palmachim Desalination Plant 
2.6  Israel Awards First Golan Oil Drilling License 
2.7  Virginia To Invest $10 Million in Israeli Agritech Companies 
2.8  Alvarion to Sell Its Carrier Licensed Division to Telrad Networks 
2.9  Modiin Energy Cancels Gabriella Drilling 
2.10  McGregor Fashion Coming To Israel 

3:  REGIONAL PRIVATE SECTOR NEWS

3.1  Alstom Signs $1.5 Billion Monorail Contract for Baghdad
3.2  IHOP Opens First Restaurant in Kuwait
3.3  First Géant Hypermarket Set To Open in Qatar 
3.4  Oshkosh Corporation Wins $380 Million UAE Military Trucks Deal 
3.5  Mobily and Jasper Wireless Partner to Power M2M in Saudi Arabia 
3.6  Israeli Tourism to Greece Reaches Record Numbers 

4:  CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1  New Eilat Railway Path Approved Despite Environmental Impact
4.2  Ministry Grants NIS 8 Million for Green Electricity Facility
4.3  IEC to Buy NIS 2 Billion of Solar Energy Over 20 Years
4.4  Jordan Unveils First Private Sector Wind & Solar Projects
4.5  Turkey's Wind Not Blowing Enough

5:  ARAB STATE & PAKISTANI DEVELOPMENTS

5.1  IIF Says Lebanon's GDP Growth Only 0.8% for 2012
5.2  Oil Discovery in Northern Lebanese Waters 
5.3  Jordan's Energy Bill Balloons 

♦♦Arabian Gulf

5.4  Qatar's Inflation Rises to 3.4% in January 2013 
5.5  Saudi IT Expenditure Up 9% To $4.1 Billion
5.6  World Bank Moving Quickly on Pledges of Support to Yemen

♦♦North Africa

5.7  Egypt's Trade Deficit Increases to Record EGP21.5 Billion
5.8  Egypt's Real GDP Growth Forecast Lowered to 3% in FY2012/13
5.9  Egypt & IMF to Resume Loan Talks Early March
5.10  Egypt to Start Rationing Subsidized Fuel July 2013
5.11  $2.5 Billion in Lost Income for Egyptian Tourism Since 2011
5.12  Egypt's Shura Council Approves Raising Military Pensions
5.13  New Oil Discovery in Libya's Ghadames Basin
5.14  World Bank Supports Moroccan Solid Waste Management

6:  TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Turkey's Unemployment Rises to 9.4%
6.2  Cyprus' New President Eyes Credibility & Germany Ties
6.3  Greek Inflation Evaporates Amid Downturn 

7:  GENERAL NEWS AND INTEREST

*REGIONAL:

7.1  Hammour Off Menu at Some UAE Restaurants
7.2  Saudi Arabia King Swears in First Women on Shura Council 
7.3  Egyptian President calls for Parliamentary Elections 
7.4  Tunisia's Prime Minister Resigns After Failing to Form Government 
7.5  Larayedh to Form New Tunisia Government 
7.6  Crisis Forces Greeks to Skimp on Weddings & Funerals 

8:  ISRAEL LIFE SCIENCE NEWS

8.1  Gamida Cell's NiCord Successful Engraftment
8.2  Teva Announces FDA Approval of Generic Adderall XR
8.3  InSightec's ExAblate Neuro Begins Phase III Trial for Essential Tremor
8.4  Neurim Positive Phase 2 Clinical Trial for Piromelatine for Insomnia
8.5  Avraham Pharmaceuticals Closes an Additional Investment Round
8.6  Afimilk Complete Solution for Sheep and Goat Farms
8.7  ApiFix Receives CE Mark for its Innovative Scoliosis Treatment System
8.8  Expanding Orthopedics Evaluates XPED Expanding Pedicle Screw System

9:  ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1  Samsung & SodaStream Four-Door Refrigerator with Sparkling Water Dispenser
9.2  NASDAQ OMX NLX Selects Mellanox's InfiniBand Solutions
9.3  Mellanox 10/40Gb/s Ethernet Solutions Boost OpenStack Performance
9.4  With $1.3 Million Funding, Getonic Unveils New Social-Viral Shopping Platform
9.5  Mellanox FDR 56Gb/s InfiniBand Accelerates Fastest Supercomputer in India
9.6  Silicom's Patent-Pending Intelligent Time-Stamping Adapter
9.7  Eveready Uses Panaya to Reduce Oracle EBS Upgrade Project
9.8  CommuniTake Multi-Channel Support Capabilities Power Holistic Care Approach
9.9  NICE Mobile Reach Selected by Telefónica to Provide Customer Service
9.10  Accel Telecom Launches First Standalone Connected Car Smartphone
9.11  Siklu's Small Cell Backhaul System in Advanced Trials
9.12  Alvarion & Aptilo Collaborate to Market Mobile Data Offloading
9.13  Wochit Launches Platform for Ever-Fresh Video Production
9.14  EveryThink Unveils Personal Information Management App for the iPhone
9.15  New Earnix 6.0 Extends Limits of Financial Services Predictive Analytics
9.16  MTS Delivers Mobile Money Solution
9.17  Ethernity Networks Unveils a Virtual Fiber Backbone Over the Air
9.18  GoNet's Next Generation MIMO Beamforming Wi-Fi Platform
9.19  Carmit Candy Industries Presents a New Line of Fortified Confectionery
9.20  N-trig DuoSense Pen2 Family for Smartphones & Tablets

10:  ISRAEL ECONOMIC STATISTICS

10.1  Israeli Home Prices Rose 6.8% in 2012

11:  IN DEPTH

11.1  ISRAEL: Israel Only Country In West To Reduce Debt
11.2  JORDAN: Energy Price Rises Inevitable
11.3  GCC: Laboring Against Themselves
11.4  UAE: Abu Dhabi New Farming Methods Give Local Crops a Boost
11.5  OMAN: New Blueprint for Tourism
11.6  OMAN: Budget Boost for Education
11.7  EGYPT: Moody's Downgrades Government Bond Rating to B3
11.8  EGYPT: Railway Plans on Track
11.9  TUNISIA & LEBANON: A Tale of Two Assassinations
11.10  TUNISIA: Violence and the Salafi Challenge 
11.11  TURKEY: Understanding Turkey's Regional Health Markets
11.12  TURKEY: Power Sector Analysis
11.13  CYPRUS: Fitch Says President's Bailout Mandate May Ease Negotiations

1:  ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1  Steinitz Claims Victory Over Barak & IDF “Black Hole”

Globes reported that in an interview with US weekly "Defense News", outgoing Minister of Finance Yuval Steinitz spoke about his repeated clashes and ultimate victory over Minister of Defense Ehud Barak, two IDF chiefs of staff and the powerful IDF and Israeli defense ministry lobby over the IDF's budgetary deficit.  He claims the victory has already saved Israel hundreds of millions of shekels in financial restraint measures.  Steinitz said, "It was a total black hole, and that’s why transparency and accountability constituted the first and most important leg of (the Netanyahu government’s) sweeping reforms...Up until last year the government approved annual top-line budgets and could earmark funds for specific projects, but nobody could verify how much of those funds actually went to the intended project."

He added, "The tax authorities didn’t even know how much to deduct from salaries because we had no access to their books.  It was an egregious violation of the law, but that was the norm.  It was axiomatic that the defense budget was untouchable."  Steinitz recalled Barak's fierce opposition.  He accused the Treasury of trying to control and dictate to the Defense Ministry.  It took Steinitz 2.5 years of hard struggle vis-à-vis Barak, two IDF chiefs of staff and a very strong lobby.

Steinitz outlined the new measures of transparency introduced, "We have computer terminals in the budget department of the Treasury that are directly connected to the Defense Ministry.  We see all contracts, tenders, progress payments and salary expenditures.  Now, we see exactly where the money is going, what is the tempo of spending and whether they are running into trouble.  Finally, after 65 years, we have proper oversight."  Steinitz said that the new changes and cuts including pension cuts will save the country several billions of shekels annually by the end of the decade.  (Globes 24.02)

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1.2  Israel’s Banks Driven to Minimal Fee Reductions

On 26 February, Israel's five leading banks published their new fees for the buying and selling of securities.  The reductions were made at the order of the Bank of Israel, on the basis of the interim report by the Zaken Committee, chaired by Supervisor of Banks David Zaken.  The committee found only a causal link between the banks' listed fees and the actual fees.

An examination by "Globes" found that Israel Discount Bank made the biggest reduction, while the reductions by the other banks were negligible.  Discount Bank cut its fee for the buying and selling of Israeli securities from 0.69% to 0.54%, and it cut the fee for the buying and selling of foreign securities by almost 30% to 0.79%.  Before the reduction, Discount Bank had the highest fees; it now has the lowest fees.  Bank HaPoalim and Bank Leumi cut their fee for the buying and selling of foreign securities by 0.1% to 0.9%, and First International Bank of Israel cut its fee by 0.05% to 0.85%, keeping its fee lower than at the two big banks.  Mizrahi Tefahot Bank cut its fee by 0.11%.  (Globes 26.02)

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2:  ISRAEL MARKET & BUSINESS NEWS

2.1  Germany's Adva Optical Acquires Biran High Tech Advisors

Germany's Adva Optical Networking has acquired LTE technologies developer Biran High Tech Advisors for a few million dollars in shares. Biran High Tech Advisors was founded by a veteran of Israel's telecommunications equipment industry in 2008 to provide outsourcing of R&D in streamlining mobile network operations, with a focus on LTE 4G networks. Adva Optical’s interest in Israel is based on Biran's expertise in mobile backhaul solutions between mobile network antennas and the network core, and network congestion solutions. Adva Optical has also invested in Saguna Networks as part of a $3 million financing round. This was Adva Optical's first investment in Israel. (Adva 14.02)

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2.2  Atlantium Raises $9 Million

Israel’s Atlantium, a water treatment company, has raised $9 million from European fund Aster Capital, which invested $3 million, Switzerland's Aeris Capital and Altantium chairman and CEO Benjamin Kahn. Atlantium will use the proceeds to accelerate development of its new ballast water treatment product and to step up market development in power generation and advanced oxidation, a process for removing biologically toxic or non-degradable materials. The company is targeting the treatment of water flow from shale-gas exploration, where a huge market opportunity is emerging. Atlantium's water treatment technology combines ultraviolet-disinfection with advanced hydraulic and fiber-optic principles. Its Hydro-Optic Disinfection solutions deliver microbial and chemical inactivation, improving the cost effectiveness of environmentally-friendly water disinfection solutions. Large industrial users of water are increasingly seeking to reduce the use of chemicals, as well as achieving biosecurity and finding solutions to contamination by invasive species.

Atlantium (http://www.atlantium.com), founded in 2003, is based in Beit Shemesh. The company's water disinfection solutions are used in the food and beverage and dairy industries and in aquaculture, as well as by municipalities. The company has installations in Europe, the US, Latin America, the Middle East, Asia and Australia. (Atlantium 14.02)

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2.3  Intel Israel Exports Doubled In 2012 to $4.6 Billion

Exports by Intel Israel more than doubled to $4.6 billion in 2012 from $2.2 billion in 2011. The company's workforce rose by 10% during last year, or 760 employees to 8,500. Indirect employees totaled 25,500. Reciprocal procurements in Israel totaled $737 million in 2012, and Intel Corporation invested $1.1 billion in its Israeli operations. Intel Israel says that Intel Corporation has invested $10.5 billion in Israel over the past decade and received $1.3 billion in Israeli government grants. Intel Israel’s message that it is very worthwhile for Intel's next fab to be built in Israel. They said Intel Israel accounts for a tenth of Israel's total industrial exports and that Intel Israel was responsible for a third of Israel's exports to China. (Intel 17.02)

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2.4  Pongr Picks Up Israeli Startup Sightec

Leading photo-marketing platform Pongr announced a game-changing acquisition of a broad IP portfolio from Sightec, an Israeli computer vision R&D company, in a deal designed to alter the way brands leverage the ever-expanding amount of photos shared around the world. Cementing category leadership while significantly expanding Pongr's current IP and software product suite, the move enables Pongr to offer breakthrough image enhancing and analysis solutions that can detect people and objects within images at groundbreaking new levels. These solutions will help brands uncover highly relevant advertising and marketing opportunities, gain actionable consumer insights, and create opportunities for instant social and mobile engagement with consumers.

Originally developed for military security camera systems, Sightec's super-resolution technology is capable of improving image quality 10X over typical image enhancement results. It can also detect people and objects within images regardless if they are in the foreground or background. This level of detection requires only 3-5 pixels vs. the 400+ required by competitive systems in use today. These significant advantages are achieved through Sightec's mathematical approach to super-resolution, a contrarian position within the field of computer vision. Pongr will be tuning the technology to make it work for brands and products, and adapting the subpixel registration capabilities for wide-scale brand image detection. Pongr will begin offering the new Sightec technology as part of its direct-response marketing platform immediately. Terms of the deal were undisclosed.

Based in Tel Aviv, Israel, Sightec is a computer vision R&D company focusing on the analysis of video and still images at the subpixel level. Sightec tackles traditional image recognition problems with alternative methodologies and solutions based on mathematical models – contrary to the industry-wide approach of searching for matching "landmarks." (Pongr 26.02)

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2.5  NanoH2O Awarded Order for Expansion of Palmachim Desalination Plant

El Segundo, California’s NanoH2O, manufacturer of the most efficient and cost-effective reverse osmosis (RO) membranes for seawater desalination, announced that it has been selected by Via Maris Desalination to provide QuantumFlux (Qfx) high rejection membranes for the expansion of the Palmachim desalination plant in Israel. Via Maris Desalination, owner and operator of the Palmachim plant, purchased QuantumFlux high rejection membranes for an existing 36,000 cubic meter capacity seawater RO train in 2012 and will commission two additional trains in 2013. These three trains will produce a combined total of 110,000 cubic meters of potable water per day. NanoH2O has a representative office in Tel Aviv, Israel. (NanoH2O 18.02)

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2.6  Israel Awards First Golan Oil Drilling License

The Israeli government has awarded the first license to drill for oil on the Golan Heights. The Ministry of Energy and Water Resources' Petroleum Council has awarded Genie Energy’s subsidiary, Genie Israel Oil and Gas, an exclusive petroleum exploration license covering 396.5 square kilometers in the southern portion of the Golan Heights. The process of granting the license began following geological tests, which indicated a large potential oil discovery in the southern Golan Heights. On the basis of the findings, last summer, Minister of Energy and Water Resources Landau declared the Golan as open for oil and gas exploration and production activity. Following the announcement, two license applications were filed with the Petroleum Commissioner for the southern Golan, an area of thousands of hectares. Genie Energy is the parent company of Israel Energy Initiative, which is moving forward on a venture to develop shale oil deposits in the coastal plain. (Genie Energy 21.02)

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2.7  Virginia To Invest $10 Million in Israeli Agritech Companies

Virginia estimates that it will invest up to $10 million in the next 2-3 years in Israeli companies that will participate in the Gateway USA: Agritech program, which is based in the state. The new program follows on the success of the previous incubator at Richmond, in which $10 million was invested in participating Israeli agritech companies. A delegation from the Virginia Israel Advisory Board (VIAB) came to Israel to interview potential companies. VIAB helped Strauss Group subsidiary Sabra Dipping Company build the largest hummus plant in the US at an investment of $100 million. Virginia has other programs for Israeli companies, including in homeland security and the life sciences. The Virginia Life Science Investments program has already invested several million dollars in Israeli companies, and intends to make large investments in the future. (Globes 21.02)

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2.8  Alvarion to Sell Its Carrier Licensed Division to Telrad Networks

Alvarion has entered into a definitive agreement with Telrad Networks, pursuant to which Telrad Networks will acquire Alvarion’s carrier licensed division. The consideration in the transaction will be $6.1 million. In addition, Alvarion may receive certain performance-based milestone payments of up to $6 million. Alvarion’s carrier licensed business started over 15 years ago and has amassed extensive commercial, technological and operational experience and know-how. Its most recent product offering – the BreezeCOMPACT family – offers a unique single-box architecture, all-outdoor chassis, small footprint and lower installation costs. The single-box architecture reduces OPEX and CAPEX by providing true macro base station performance in an optimized all-outdoor/all-in-one small form factor. The BreezeCOMPACT is TD-LTE Advanced-ready with a software upgrade. Launched during the second quarter of 2012, the BreezeCOMPACT has been successfully deployed by tier one and tier two operators in Latin America, Eastern Europe and Africa.

Alvarion and Telrad Networks have also agreed to sign a reseller agreement according to which Alvarion will continue to provide carrier licensed solutions to its partners and distributors and Telrad will provide Alvarion’s unlicensed solutions to its carrier customers after the transaction is completed. Consummation of the transaction is subject to certain closing conditions and is expected to occur during Q3/2013. (Alvarion 22.02)

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2.9  Modiin Energy Cancels Gabriella Drilling

Modiin Energy has cancelled the drilling plan for the Gabriella license because of the dispute with its partners, Adira Energy Corporation and Brownstone Energy, over who should finance the exploration activity and when money is due to be transferred. Modiin Energy owns 70% of the Gabriella license and Canada's Adira Energy and Brownstone Energy each own 15%. Modiin Energy said that the rig's owner, Noble Drilling, had received from it a letter of credit of $3 million, in addition to a $12 million letter of credit, which together should cover the operating and waiting costs until the balance of money from the other licensees in the project is received. Modiin Energy said that the rig would leave the license area immediately and go to Malta and that the rig's transportation costs "will be deducted from the letters of credit." (Globes 25.02)

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2.10  McGregor Fashion Coming To Israel

International fashion brand McGregor, which manufactures luxury casual wear, will open its first flagship store will open in March at Tel Aviv's Azrieli Mall. The new store will stretch over 170 square meters (1,830 square feet). The brand's Israeli franchisees are Yoav Basan, the former CEO of Tommy Hilfiger Israel, and his wife, Attorney Maya Milstein. The couple plans to open 10 McGregor stores in Israel in the next five years. McGregor will be one of the first international brands to arrive in Israel since American Eagle Outfitters entered the market last year. Due to the drop in fashion sales over the past year, Israeli entrepreneurs have been holding back their plans to bring in new brands. The new brand offers premium fashion for women, men and children, accessories, bags and shoes. (Ynet 13.02)

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3:  REGIONAL PRIVATE SECTOR NEWS

3.1  Alstom Signs $1.5 Billion Monorail Contract for Baghdad

French firm Alstom has reportedly signed a $1.5-billion deal with Iraqi authorities for the design and construction of a monorail system in Baghdad. The contract was signed by Baghdad Governor Salah Abdulrazzaq and Alstom representatives in the Iraqi capital. The first phase will be 25 kilometers long and will require the building of 14 stations. Iraq will pay the cost in installments over a six-year period. Abdulrazzaq said there is to be a second phase, but did not mention when a contract for its construction will be announced. (Azzaman 14.02)

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3.2  IHOP Opens First Restaurant in Kuwait

DineEquity, parent company of Applebee's Neighborhood Grill & Bar and IHOP Restaurants, announced that IHOP, the iconic brand famous the world over for its pancakes, omelets and breakfast items as well as lunch and dinner choices, opened its first location in Kuwait on 16 February, expanding its presence in the Middle East as part of a multi-restaurant franchise agreement with M.H. Alshaya Co., a leading international franchise operator. The new restaurant follows the success of two locations in Dubai, which Alshaya opened in September 2012. Alshaya’s multi-restaurant franchise agreement with IHOP Franchise Company calls for 40 restaurants, with plans to expand to other countries across the Middle East including Saudi Arabia, Jordan, Lebanon, Qatar, the UAE, Oman, Bahrain and Egypt. (DineEquity 20.02)

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3.3  First Géant Hypermarket Set To Open in Qatar

Qatari retail group Al Meera has announced that its first Géant hypermarket will open as part of an agreement signed with France's Casino in 2011. Al Meera Consumer Goods Company said the first hypermarket would open at Hyatt plaza in Doha. The opening follows an agreement signed between Al Meera and French retailer Casino to develop a network of hypermarkets and supermarkets under the Géant banners in selected Middle East countries. Casino, Al Meera and Retail Arabia had earlier signed a sub-franchise agreement allowing Al Meera Holding to develop and operate hypermarkets and supermarkets under the Géant banner in Qatar and Oman. The first Qatar opening will reinforce the presence of the Géant in GCC countries - where it has more than 10 stores in operation in the UAE, Kuwait and Bahrain. As well as being a franchise for Géant, Al Meera operates more than 20 supermarkets under its own banner in the gas-rich state of Qatar. (AB 23.02)

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3.4  Oshkosh Corporation Wins $380 Million UAE Military Trucks Deal

US defense contractor Oshkosh Corporation has won a $380m deal to provide the UAE with 750 armored vehicles. Wisconsin-based Oshkosh will supply the Gulf state's armed forces with 750 mine-resistant M-ATV trucks. The vehicles, which are also used by the US and Polish militaries, were deployed in US-led conflicts in Iraq and Afghanistan. The deal was announced at the IDEX show in Abu Dhabi and the M-ATV has a list price of about $480,000 per vehicle. Oshkosh may be interested in opening a manufacturing plant in the region to service Middle Eastern customers within the next five years, although this may only be on a temporary basis. (AB 18.02)

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3.5  Mobily and Jasper Wireless Partner to Power M2M in Saudi Arabia

Mobily, one of the leading communications companies in KSA, along with Mountain View, California’s Jasper Wireless, the leading connected devices platform for machine-to-machine (M2M) and consumer electronics, announced an agreement to wirelessly connect machine-to-machine (M2M) and consumer electronics devices in Saudi Arabia. The Jasper Wireless platform is a cloud-based solution that will enable Mobily to quickly and at low cost connect devices across its network. Jasper Wireless will provide Mobily with the necessary applications and services to profitably connect and manage a range of embedded wireless devices across myriad verticals including automotive telematics and infotainment, consumer electronics, smart metering and building automation. (Jasper Wireless 23.02)

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3.6  Israeli Tourism to Greece Reaches Record Numbers

Some 400,000 Israelis visited Greece last year, and a further growth in the number of tourists is expected this year, Greek Tourism Minister Kefalogianni said. Kefalogianni arrived in Israel recently with a large delegation to participate in the International Mediterranean Tourism Market (IMTM) held in Tel Aviv. According to the minister, 2012 was a record year in tourism from Israel to Greece for several reasons – apart from the boycott on Turkey. (Ynet 13.02)

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4:  CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1  New Eilat Railway Path Approved Despite Environmental Impact

The Southern Zoning Committee approved a bid by the Israel National Roads Company to build new train tracks in the country's south, despite an environmental impact report that deemed the project harmful. The train track are expected to run though plant and wildlife reservations, as well as known hiking trails, but unlike similar projects that aimed to minimize their environmental impact, the new project will not make use of the usual solution of tunnels, as suggested by the Environmental Protection Ministry Israel Nature and National Parks Service. The committee decided to approve the bid, which will stretch across much of the Arava region and will infringe on the Zin River reservation, which both the ministry and the INPS deem one of the area's most sensitive reservations. The Interior Ministry, which backed the bid, said that the path suggested was "feasible from fiscal and engineering standpoints, has minimal safety hazards and minimal environmental impact. It will also offer passengers a scenic view of the road." (Ynet 18.02)

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4.2  Ministry Grants NIS 8 Million for Green Electricity Facility

Israel’s Environmental Protection Ministry has granted $2.08 million in financial assistance to Arrow Ecology, an environmental management services company, in favor of building a domestic organic waste treatment facility in Hiriya – the site is a former landfill southeast of Tel Aviv. Hiriya was decommissioned several years ago and has since been turned into a waste transfer station, a recycling park and an environmental education center. The facility is expected to handle 201 tons of domestic waste per day during the first stage of operations, and subsequently produce some 2 MW of electricity and 100 tons of compost a day. The ministry has already appropriated $3.24 million in order to set up six similar facilities throughout the country, within the next two years. (Ynetnews 20.02)

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4.3  IEC to Buy NIS 2 Billion of Solar Energy Over 20 Years

Israel Electric Corporation will buy NIS 2 billion of electricity from four solar energy companies over 20 years. The utility will buy 200 MW from independent photovoltaic power facilities. The contracts are with Solproject 7 (43 MW), Ketura Solar (45 MW), Zmorot Solar Park (53 MW), and Enlight Renewable Energy Solutions (62 MW). IEC's board of directors approved a plan under which the private power producers will build the photovoltaic facility, which IEC will hook up to the national grid and promises to buy all the electricity sent to the grid on the basis of the generic draft agreement approved by the Ministry of Energy and Water Resources. The power purchasing agreements are subject to approval of the Government Companies Authority on the basis of the prices and terms set in the provisional licenses it has awarded. (Globes 24.02)

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4.4  Jordan Unveils First Private Sector Wind & Solar Projects

Jordanian Energy Minister Batayneh unveiled plans for the country’s first private sector renewable energy projects as part of efforts to ease the Kingdom’s ongoing energy crunch. Batayneh said the government launched talks with two private sector firms to establish a 10 MW solar plant in the northern city of Mafraq and a 117 MW wind farm on the outskirts of the southern city of Tafileh. The initiatives come as part of some 30 memoranda of understanding signed between the government and local and international investors to establish up to 1,000 MW worth of small- and medium-scale renewable energy projects across the country over the next five years. The proposed photovoltaic solar plant, to be established by the Philadelphia Solar Power Company in the Manara region on the outskirts of Mafraq, is to be built on a build-operate-own basis at a cost of JD16 million over the next 16 months. The 117 MW wind farm, which will be built by the local Jordan Wind Power Company at a cost of some JD205 million, is to come online by 2014. Officials expect to finalize negotiations with the two firms by April.

Jordan’s energy bill is expected to reach a record JD4 billion in 2013, with a domestic energy demand growth rate of 7% that requires between JD300 million and JD400 million in annual investments in the electricity sector. Within the Kingdom's energy strategy, the government seeks to boost solar and wind energy’s contribution to the national energy mix from 1 to 10% by the end of the decade, a goal that requires up to $1 billion in investment. (AB 20.02)

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4.5  Turkey’s Wind Not Blowing Enough

Turkey lags far behind developed countries when it comes to generating wind energy, while the world’s wind energy leaders, China and the US, installed more than 13,000 megawatts (MW) of new capacity last year, according to statistics released by the Global Wind Energy Council (GWEC). While last year Turkey increased its electricity generation from wind energy from 1,806 MW seen a year earlier to 2,312 MW with a 506 MW increase, it is still far from its goal of generating 20,000 MW from wind energy by 2023. It is estimated that Turkey has a technical capacity of 40,000 MW.

However, wind power plants benefit from state incentives in Turkey. If 55% of the materials used for plant construction are local, the state increases its guarantee of purchase by 30%. General Electric, one of world’s leading energy companies, has been in the process of carrying out works to build a local wind tribune in Turkey. Turkey is considered at a disadvantage due to its lack of tribune manufacturing industry. The long permission process is also another obstacle against wind energy investments. An area must be declared a wind field, but 20 or 30 institutions are asked for their opinions in a process that lasts more than one year. The permission of the General Staff and National Intelligence Service has recently been required. (HDN 27.02)

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5:  ARAB STATE & PAKISTANI DEVELOPMENTS

5.1  IIF Says Lebanon’s GDP Growth Only 0.8% for 2012

The Institute of International Finance estimated that Lebanon’s GDP growth fell to 0.8% in 2012, down from 1.8% in 2011, saying the decline highlighted the need for a stable political environment and structural reform. The IIF said the decline was mainly caused by internal tensions adversely affecting investment, tourism, exports and foreign direct investment. The situation in Syria, as well, continues to pose a threat to Lebanon’s economic stability. The country had so far received an influx of 250,000 Syrian refugees, equivalent to 4% of the Lebanese population. It added that a small portion of those refugees, considered to be well-off financially, have mitigated the downturn in certain sectors, mainly the rental market. (IIF 26.02)

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5.2  Oil Discovery in Northern Lebanese Waters

Lebanon’s estimated oil & gas reserves have been boosted by the recent discovery of offshore oil reserves estimated between 440 million to 675 million barrels. French consulting firm Beicip Franlab (advisors to the Lebanese Ministry of Energy and Water) have published a report which has shown for the first time the existence of significant oil reserves in Lebanese territorial waters, close to Lebanon’s northern maritime boundary with Cyprus and Syria. According to the report, there are at least five reservoirs in this northern offshore area. The quantities reported are estimated from data taken from three out of five reservoirs surveyed and analyzed. The Lebanese Minister of Energy noted that the presence of liquid in this area supports experts’ expectations of a high probability of oil in deep waters in other areas. With gas reserves estimated between 12-16 TCF, Lebanon’s First Licensing Round is attracting key industry players. The indication that Lebanese offshore waters may likely contain oil reserves is expected to further boost the industry’s interest. (BI-ME 18.02)

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5.3 Jordan’s Energy Bill Balloons

Jordan’s energy bill rose by 20.7% reaching JD4.7 billion at the end of 2012, compared with JD3.9 billion in 2011. The surge was attributed to an increase in imports of crude oil and diesel especially for generating electricity. According to the Department of Statistics (DoS), imports of those products accounted for 32% of Jordan’s total imports which amounted to JD14.7 billion. Other statistics showed that the trade deficit widened by 17.2% last year to JD9.1 billion at current prices compared with JD7.7 billion in deficit recorded in 2011. The DoS noted that the coverage ratio of total exports to imports has declined by 4.2%age points to 38.1% from 42.3%.

Imports rose by 9.3% to JD14.7 billion last year compared with JD13.4 billion in 2011. Topping the list of imports were petroleum products, cars/bikes and their spare parts, steel, grains, equipment and tools, and electrical appliances. Exports amounted to JD4.7 billion, 1.2% lower than the JD4.8 billion registered in 2011. Exports were mostly garment and pharmaceutical products, crude potash, fertilizers and crude phosphate. (Petra 25.02)

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♦♦Arabian Gulf

5.4  Qatar’s Inflation Rises to 3.4% in January 2013

Annual inflation in Qatar jumped to 3.4% y-o-y in January 2013, up from 2.6% y-o-y in December 2012, according to new data released by Qatar Statistics Authority. Inflation also rose by 0.7% m-o-m compared to December 2012. The highest increase in prices was witnessed by recreation, entertainment and cultural activities, which accounts for 11% in the CPI basket, rising by 7.5% y-o-y and 2% m-o-m. Meanwhile, rents, fuel, and energy, which accounts for the highest weight in the CPI basket (32%), rose by 4.4% y-o-y and 1% m-o-m. Food prices picked up again to 3% y-o-y in January 2013, from 1.7% y-o-y in December 2012. (Beltone 14.02)

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5.5  Saudi IT Expenditure Up 9% To $4.1 Billion

Saudi Arabia has remained one of the biggest IT markets in the region, with IT expenditure projected to have sustained a 9% year-on-year growth reaching $4.1 billion in 2012. KSA’s healthcare sector is expected to account for a significant percentage of the Kingdom’s massive IT investments, as the Saudi Government continues to take advantage of the latest technological advances to address the growing healthcare requirements of the rapidly expanding Saudi population. In 2012 alone, KSA’s healthcare expenditure already reached $ 24.35 billion, achieving a 16% increase compared to the previous year. A substantial percentage of the total expenses was used to purchase specialized e-Health and related IT solutions for healthcare. Moreover, KSA allocated $ 1.74 billion for medical devices in 2012, up 17.8% from 2011. (BI-ME 19.02)

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5.6  World Bank Moving Quickly on Pledges of Support to Yemen

The World Bank Group is delivering on its commitments to Yemen with the announcement of three new projects totaling $206 million. The projects will expand the ongoing $700 million program of support for both the reconstruction effort and the transition process, and represent the first installment of an additional $400 million pledged at last year’s Yemen donor conference. The World Bank Group pledge of $400 million forms part of $7.5 billion committed by the international community in support of Yemen at the Donors Conference in Riyadh and Friends of Yemen meeting in New York, in September and November, 2012. The funds will be vital for meeting the budget shortfalls in the Government of National Reconciliation’s plan for economic reconstruction, and to create a stable environment for the critical political processes underway in the National Dialogue, the drafting of a new constitution and subsequent elections. The three new projects will be funded through grants from the International Development Agency, the Bank’s arm for the world’s poorest countries. They are aimed at expanding essential infrastructure and improving conditions for the most vulnerable segments of society, who continue to suffer some of the severest impacts of the recent crisis. (WBG 14.02)

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♦♦North Africa

5.7  Egypt’s Trade Deficit Increases to Record EGP21.5 Billion

The trade deficit for Egypt reached a record EGP21.5 billion in November 2012, an increase of 28.8% from EGP16.7 billion in November 2011, according to newly released data by CAPMAS. The trade deficit in November 2012 also widened from EGP13.8 billion in October 2012, and exports had declined by 1.5% y-o-y to EGP14.9 billion in November 2012. This is likely a reflection of lower volumes rather than price effects, in our opinion. Meanwhile, imports increased by 14.4% y-o-y to EGP36.4 billion in November 2012, reflecting the price effects of a depreciating EGP against the $ and other currencies for key commodities, including crude oil, refined oil products, wheat, plastics, and passenger cars. Latest data shows that the EGP had depreciated by around 5.82% YTD to the dollar, compared to a 4.9% depreciation in 2012. A widening trade deficit is likely to exacerbate further downward pressure on the balance of payments. The net international reserve position had already fallen to $13.6 billion in January 2013, equivalent to 2.7 months of import cover, according to latest figures. (CAPMAS 21.02)

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5.8  Egypt’s Real GDP Growth Forecast Lowered to 3% in FY2012/13

Real GDP growth in Egypt is now expected to reach 3% in FY2012/13, down from a previous forecast of 3.5%, Planning and International Cooperation Minister Ashraf el-Arabi said on 18 February. Real GDP growth is likely to have slowed to 2.4% y-o-y in 2Q2012/13 from 2.6% y-o-y in 1Q2012/13, according to el-Arabi. El-Arabi added that loan talks with the IMF are expected to resume and an IMF technical team is scheduled to visit Egypt in the coming weeks. Around $9 billion in aid, pledged to Egypt from the European Union and the African Development Bank, will be unlocked once the IMF loan deal is signed, he added. (Ahram Online 18.02)

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5.9  Egypt & IMF to Resume Loan Talks Early March

Egypt will resume talks with the International Monetary Fund on financial aid early next month, the country's investment minister Osama Saleh said on 25 February. Saleh said an agreement with the IMF had almost been in place in December but that a change in public opinion meant it collapsed. In a wide-ranging talk on Egypt's economic crisis and efforts to resolve it, Saleh said authorities intended to raise money partly by imposing a 10% capital gains tax on initial public offers of shares. Companies set up as part of major projects, around the Suez Canal and the Upper Egypt Development Corridor, will have to sell shares to the public as a condition of being established. A law allowing the government to issue sukuk (Islamic bonds) is expected to be passed within a few days, while talks are underway between the investment ministry and the central bank on ways to provide soft loans to small and medium-sized companies, he added. (AB 25.02)

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5.10 Egypt to Start Rationing Subsidized Fuel July 2013

Cairo is due to implement its rationed fuel subsidy program at the beginning of July 2013, said Minister of Petroleum Osama Kamal in a televised interview on 18 February. The new quotas, to be implemented through a system of cards allowing drivers a limited amount of subsidized fuel, were initially planned to start in April 2013. Kamal had previously stated that the fuel subsidy program will be implemented between April and July of this year. This is part of the wider economic reform package that has been proposed to the International Monetary Fund (IMF) in order to secure the $4.8 billion loan in aid. The reforms include a hike of EGP0.75 on cigarette taxes for local brands and EGP1.25 for imported brands. Custom duties on certain luxury goods would be raised and subsidies on diesel and gasoline fuel for tourism facilities are also expected to be lifted in April 2013. The Freedom and Justice Party (FJP) has already approved the program, which would also be presented to other political parties to study, the source added. (Various 18.02)

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5.11  $2.5 Billion in Lost Income for Egyptian Tourism Since 2011

Egypt’s tourism sector incurred losses in expected income of around $2.5 billion since the revolution started in January 2011, Al-Ahram reported. About 11.5 million tourists visited the country in 2012 and generated some $10 billion in revenues. In 2010, around 14.7 million tourists visited Egypt, generating $12.5 billion in revenues. Egyptian Minister of Tourism Zaazou will reportedly launch a live streaming channel to allow tourists to ascertain the security situation in Egypt, and to promote the country as a safe tourist destination. The ministry will provide big screens to different countries, to display live images from Egypt. The move comes after an agreement was made with the state’s ministry of telecommunication. The Ministry of Planning announced that the tourism sector saw figures of 6.3 million tourists and $5.6 billion in revenues in the first half of the current fiscal year 2012/13. This represented a 10% rise in tourist numbers and a 12% rise in revenues compared with the first half of the last fiscal year. (Ahram 21.02)

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5.12  Egypt’s Shura Council Approves Raising Military Pensions

Egypt’s Shura Council approved a proposal to raise pensions for military personnel from 15% to 20%. The raise puts no maximum limit for the monthly pension of retired military personnel. The council asserted that the law is consistent with the state’s public policy, which aims to raise the incomes of citizens, enabling them to live prosperously, and seeks to provide retired citizens with more care, reported statement by Al-Ahram. The council added that the law achieves equality of pensions for both military and civil workers. The council previously discussed a report issued by the national security committee dealing with the newly approved law. Reacting to the raise, the government prepared a law proposal to amend Law 155 of 2005, which dealt with pensions for military personnel. The amendments included raising the military pensions to 20% to reflect civilian workers’ pensions. (DNE 24.02)

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5.13  New Oil Discovery in Libya’s Ghadames Basin

The Libyan National Oil Corporation (NOC), along with Algerian state-owned Sonatrach, has made an oil and natural gas discovery in the Ghadames Basin, about 370 miles southwest of Tripoli. The discovery consists of one oil field with a capacity of 8,200 barrels per day (bpd), and a gas deposit with a capacity of 1,700 cubic meters per day. The discoveries were made in Areas 95/96; no time frame for the development was announced. (Libya Herald 15.02)

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5.14  World Bank Supports Moroccan Solid Waste Management

A $130 million loan will support the reform of the solid waste sector so that Moroccans gain more equal access to collection and disposal services in urban areas and create up to 70,000 jobs in waste recycling activities. The Third Municipal Solid Waste Sector Development Policy Loan, approved by the World Bank Board of Directors, will also improve accountability through regular monitoring and ensure that waste management is environmentally safe. For the first time in Morocco, citizen report cards will be introduced allowing people to provide direct feedback on quality and coverage of solid waste services in their cities. The program will also increase transparency by giving citizens access to policy information and disclosure of contracts with private companies. The growing rate of waste generation in Morocco is putting significant pressure on environment and natural resources. This underlines the need to develop disposal practices that are safe and inspected regularly in line with environmental norms and standards. The reform of the sector is key to helping Morocco achieve its objectives of having 20% of its waste recycled and ensure that all municipal solid waste is collected and disposed of in sanitary landfills by 2022. (WBG 14.02)

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6:  TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Turkey's Unemployment Rises to 9.4%

Turkey’s unemployment rate rose to 9.4% in November 2012, according to official data released today by the state-run statistics body TÜIK. The number of jobless rose to 2.63 million in November 2012, an increase of 210,000 people from the same period a year earlier. The jobless rate also showed a 0.3% increase in the same period, reaching 9.4%. The rate in non-agricultural sectors also reached 11.4% with a 0.3% rise. However, more than 1 million jobs were created this year compared to the same period last year, which upgraded the employment number to 25.29 million as the employment rate increased from 44.9% to 45.9% in the same period. The labor force participation rate increased to 50.7% thanks to a 1.3% rise. The informal workers rate fell to 50.7% with a 2.2% decrease. (TÜIK 15.02)

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6.2  Cyprus’ New President Eyes Credibility & Germany Ties

In what was probably the most short-lived victory celebration in Cyprus history, president-elect Nicos Anastassiades wrapped up a six month long campaign with two speeches and a short press briefing, ready to start work on a multi-billion euro bailout from Eurozone partners and the IMF. Expected to announce a cabinet of proven politicians and technocrats who will deal with a bankrupt economy and record unemployment, Anastassiades also has to face angry criticism within Germany about transparency surrounding billions of euros in Russian bank deposits. How he deals with skepticism in Berlin and other leading Eurozone capitals will determine how soon Cyprus will secure a €17.5b bailout from its international lenders, in exchange for a drastic reduction in public sector spending, privatizations and a recapitalization of its banks that were hit by the haircut of Greek government bonds. The only good news is the recent discovery of natural gas deposits off the southern coast and adjacent to Israeli gas fields, an area that Turkey wants to put a claim to in order to have a say in eastern Mediterranean affairs. (FM 25.02)

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6.3  Greek Inflation Evaporates Amid Downturn

Greek inflation evaporated in January, hitting its lowest level since data began in 1996, the national statistics service (ELSTAT) said, as the country's economic downturn sapped consumer price pressures. The EU-harmonized consumer inflation rate (HCPI) was 0.0% year-on-year in January, ELSTAT said, below a 0.2% forecast in a Reuters’ poll of economists. Five years of austerity-driven recession have brought Greek price rises to a halt after a debt-fuelled boom since the country joined the euro in 2001 led inflation to accelerate at almost twice the average euro-area pace. Cuts in public sector pay and pensions have contributed to an internal devaluation process aimed at making the 195 billion euro economy more competitive. In 2012, Greece's HCPI rate dropped below the euro zone average for the first time since Athens joined the euro. The government and the EU expect Greece to be in deflation territory this year with the HCPI rate dropping to -0.8%.

Greece's economy is expected to shrink again this year, by 4.5%, bringing total GDP contraction since the recession began to almost a quarter. Households' real disposable income over the past three years has shrunk by almost a third. Unemployment has climbed to an all-time record of 27%, the highest in the 17-nation euro zone, also dampening price pressures. (ekathimerini 15.02)

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7:  GENERAL NEWS AND INTEREST

*REGIONAL:

7.1  Hammour Off Menu at Some UAE Restaurants

A number of UAE-based hotels and restaurants have opted to take hammour off the menu due to concerns about overfishing of the species, but many continue to offer the endangered fish. Dubai Indian restaurant Ushna is among those that have stopped serving the local orange spotted grouper, in light of recent discussions highlighting over-farming of the slow-producing fish, which is often caught before it has had the opportunity to breed. Others include Le Royal Meridien Abu Dhabi, the recently-opened Dubai Indian restaurant Memsaab by celebrity chef Anil Kumar, and popular Dubai-based Asian restaurant Mango Tree, Hotelier Middle East reported. According to the Environment Agency Abu Dhabi, overfishing of hammour has placed the species on the endangered list. In recent years, hammour has been over-fished seven times above the level that would allow the species to naturally replenish itself.

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7.2  Saudi Arabia King Swears in First Women on Shura Council

Saudi Arabia's King Abdullah has sworn in 30 women to the previously all-male Shura Council, seen by many as a major step in female participation in public life in the conservative kingdom. It is the first time in country's history that women have been able to hold any political office. The council advises the government on legislation and comprises 150 members. Critics say the move is only symbolic, as the council cannot make laws and its members are all appointed by the king.

However, King Abdullah appeared on state television, welcoming the women at a swearing-in ceremony. The monarch, seen as a proponent of gradual reform, has also granted women the right to vote and stand in the next municipal elections, scheduled for 2015. Some Saudi clerics have criticized allowing women onto the Shura Council, saying it was against Sharia (Islamic law). The king said he had consulted religious scholars, who had approved the move, before he made the appointments in January.

Despite the latest move, women still have little role in public life in the conservative state. They are forbidden from driving, are currently excluded from holding high political office. They are also unable to travel without permission from a male guardian and may not mix with unrelated men. (Various 21.02)

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7.3  Egyptian President calls for Parliamentary Elections

Egyptian President Mohamed Morsi has called for parliamentary elections to begin 27 April, eliciting concerns from opposition parties. According to the presidential decree issued on 21 February, the elections for parliament's lower house will take place over four stages through the end of June. The new People's Assembly will then be expected to convene on 6 July. The previous body was dissolved in June 2012 after the January elections for the lower house were deemed unconstitutional. Morsi's Islamist Freedom and Justice Party, which took around 40% of the vote in the initial elections, expressed satisfaction with the decision while opposition parties have shown alarm. (FP 22.02)

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7.4  Tunisia’s Prime Minister Resigns After Failing to Form Government

Tunisian Prime Minister Hamadi Jebali resigned on 19 February after failing to push through his plan for a new technocrat government. Jebali dissolved the government as political tensions heightened after the 6 February assassination of opposition leader Chokri Belaid. Jebali had said he would step down if his ruling Islamist Ennahda Party rejected his proposal. After a meeting with President Moncef Marzouki he said, "I vowed that if my initiative did not succeed, I would resign and I have done so." He did not rule out returning to the government, but insisted it be inclusive and free from political infighting. On 18 February, head of Ennahda Rachid Ghannouchi put forward an alternative proposal for a government mixed with politicians and technocrats and said that there was consensus that Jebali remain as prime minister. The continued political instability in Tunisia has further jeopardized the country's fragile economy. (FP 20.02)

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7.5  Larayedh to Form New Tunisia Government

On 22 February, Tunisia's ruling Islamist party named Interior Minister Ali Larayedh as its candidate for the next prime minister. The new prime minister is expected to announce the composition of the new cabinet in the coming days, before submitting it to the Constituent Assembly for approval. The new government needs to secure an outright majority (109 votes), a number that is already available to Ennahda and its allies. A number of opposition parties announced their refusal to support the new government if Jebali were not re-nominated. They also asked for the setting of elections, the elimination of violence and the dismantling of the Leagues for Protection of the Revolution. Although Larayedh is a prominent leader in the Islamist Ennahda Movement, the opposition criticized his performance as interior minister. They pointed to a number of security failures, including the attack on the US Embassy in Tunis, the violence in Siliana and the assassination of leftist leader Chokri Belaid. (Magharebia 25.02)

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7.6  Crisis Forces Greeks to Skimp on Weddings & Funerals

Fewer Greeks are walking down the aisle as their country's deep economic crisis takes a toll on their famously lavish weddings, an age-old ritual that has become an unbearable cost for those struggling to make ends meet. Religious wedding ceremonies in bell tower chapels overflowing with flowers, meter-high candles and candy wrapped in tulle, are a deeply ingrained tradition in Greece, where the powerful Orthodox Church plays an influential role in society. But as recession slides into its sixth year, unemployment rises and poverty spreads, a church wedding is a luxury many couples can no longer afford. The number of Greek couples who tied the knot in church tumbled to 28,000 in 2011, two years into Europe's debt crisis, compared to the pre-crisis level of 40,000 in 2008, according to the country's statistic service ELSTAT. In contrast, the number of low-key civil unions skyrocketed to 26,000 in 2011 from about 8,000 a decade earlier. As Greece's crisis deepens and successive governments are forced to impose wage cuts and tax rises in exchange for the foreign aid keeping the economy afloat, the wedding industry's countless shops and planners are also feeling the pinch.

The downturn has also had an unexpected effect on another ceremony revered by many Greeks - funerals. With more and more Greeks having trouble paying for funerals, municipal authorities in Athens have reduced the cost of burial in the capital's cemeteries. Some Greeks do not collect their dead loved ones from the hospital to avoid having to pay for the funeral. Others can no longer afford a traditional marble tombstone and so leave plots as simple dirt mounds overgrown by weeds, a cemetery official said. (FM 22.02)

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8:  ISRAEL LIFE SCIENCE NEWS 

8.1  Gamida Cell’s NiCord Successful Engraftment

Gamida Cell announced the successful results of the Phase I/II study of its second pipeline product NiCord, umbilical cord derived stem cells expanded using the company’s proprietary NAM technology. Eleven patients, ages 21-61, with high-risk hematological malignancies received NiCord and an un-manipulated graft of umbilical cord blood. Eight patients engrafted with NiCord. The median time to neutrophil engraftment was 10.5 (7-18) days for those engrafting with NiCord. Two patients engrafted with the un-manipulated UCB and one patient experienced primary graft failure. There were no cases of Grade III/IV acute GvHD. No safety concerns surrounding the use of NiCord were raised. With a median follow-up of 8 months, the progression-free and overall survival are both 90%.

Jerusalem’s Gamida Cell (http://www.gamida-cell.com) is a world leader in stem cell population expansion technologies and stem cell therapy products for transplantation and regenerative medicine. The company’s pipeline of stem cell therapy products are in development to treat a wide range of conditions including blood cancers, solid tumors, non-malignant hematological diseases such as hemoglobinopathies, neutropenia and acute radiation syndrome, autoimmune diseases and metabolic diseases as well as conditions that can be helped by regenerative medicine. Gamida Cell’s therapeutic candidates contain populations of adult stem cells, selected from non-controversial sources such as umbilical cord blood, bone marrow and peripheral blood, which are expanded in culture. (Gamida Cell 15.02)

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8.2  Teva Announces FDA Approval of Generic Adderall XR

Teva Pharmaceutical Industries announced that the U.S. FDA approved its Abbreviated New Drug Application (ANDA) for the generic version of Shire’s Adderall XR Capsules, 5mg, 10mg, 15mg, 20mg, 25mg and 30 mg capsules for the treatment of attention deficit hyperactivity disorder. Teva currently sells a generic version of Adderall XR Capsules under a 2006 license and distribution agreement with Shire as part of a settlement of patent litigation between Shire and Teva’s subsidiary Barr Pharmaceuticals. Under the terms of the agreement, Teva has the right to be supplied product by Shire through April 1, 2014. Teva Pharmaceutical Industries (http://www.tevapharm.com) is a leading global pharmaceutical company, committed to increasing access to high-quality healthcare by developing, producing and marketing affordable generic drugs as well as innovative and specialty pharmaceuticals and active pharmaceutical ingredients. Headquartered in Israel, Teva is the world's leading generic drug maker, with a global product portfolio of more than 1,000 molecules and a direct presence in about 60 countries. (Teva 14.02)

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8.3  InSightec's ExAblate Neuro Begins Phase III Trial for Essential Tremor

InSightec received FDA approval to begin its pivotal Phase III clinical trial for treatment of essential tremor using ExAblate Neuro. This trial is intended to provide the safety and effectiveness data about the use of ExAblate Neuro in order to support FDA pre-marketing approval. ExAblate Neuro uses MR guided focused ultrasound therapy to provide an incision-less treatment, through the intact skull, with no ionizing radiation. ExAblate MR guided focused ultrasound (MRgFUS) uses high intensity ultrasound waves to destroy target tissue in the brain while the patient lies in an MRI, which provides continuous visualization, plan, guidance, monitoring, and control of the treatment. The trial is based on the safety and initial effectiveness results from 15 patients treated in FDA feasibility trial sponsored by the Focused Ultrasound Foundation.

Tirat Carmel’s InSightec (http://www.insightec.com) is privately held by Elbit Imaging, General Electric and MediTech Advisors. Founded in 1999 InSightec developed ExAblate to transform MR-guided Focused Ultrasound (MRgFUS) into a clinically viable technology. (Insightec 19.02)

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8.4 Neurim Positive Phase 2 Clinical Trial for Piromelatine for Insomnia

Neurim Pharmaceuticals announced positive results from a phase II clinical study evaluating the efficacy and safety of Piromelatine (Neu-P11), a novel investigational multimodal sleep medicine developed for the treatment of patients with primary and co-morbid insomnia. The new results are from a recent double-blind, randomized, placebo controlled, parallel group, non-confirmatory, sleep-laboratory study. The study evaluated piromelatine compared to placebo in 120 adult primary insomnia patients ages 18 years and older. Piromelatine is thought to work through a combination of MT1\MT2 (potential sleep promoting and chronobiotic effects) and 5HT1A\D (potential anxiolytic and analgesic effects) receptors agonism. Tel Aviv’s Neurim Pharmaceuticals (http://www.Neurim.com), founded in 1991, is a drug discovery and development company focused on the central nervous system (CNS). It's first approved drug, Circadin - prolonged release melatonin for insomnia is commercially available in more than 40 countries around the world. (Neurim 18.02)

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8.5 Avraham Pharmaceuticals Closes an Additional Investment Round

Avraham Pharmaceuticals announced that Yissum Research Development Company, the technology transfer arm of the Hebrew University of Jerusalem, Pontifax, Clal Biotechnology Industries and the Technion Research and Development Foundation (TRDF) invested an additional $ 5.7 million in the Company. Following the current investment round, Yissum and Integra Holdings, Yissum's biotech holdings company, will now hold 47% of the shares of Avraham Pharmaceuticals. Avraham Pharmaceuticals will use the newly invested capital to pursue the advanced product development program for ladostigil, a novel molecule designed for the treatment of mild cognitive impairment (MCI) and early stages of Alzheimer's disease. The Company will continue to conduct its on-going 36-month, multi-center, randomized, double-blind, placebo-controlled, Phase II study to evaluate the safety and efficacy of ladostigil in patients diagnosed with MCI. To date, 150 patients out of a total of 200 patients have already been recruited in 16 centers in Germany, Austria and Israel.

Founded in 2010, Avraham Pharmaceuticals (http://www.avphar.com) develops ladostigil, a unique, multi-functional drug substance for the treatment of mild cognitive impairment, currently undergoing a Phase II clinical trial. (Avraham Pharmaceuticals 21.02)

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8.6 Afimilk Complete Solution for Sheep and Goat Farms

Afimilk has introduced its sheep and goat management system, AfiShepherd, to the US market. Already, the AfiShepherd system has been successfully integrated into six dairy farms in North America. AfiShepherd represents the world's leading management system for sheep and goats. Monitoring animal health, production and fertility, the system contributes to increased milk production, automatic selection and group level management and labor efficiency. The product of years of field-tested and proven experience, the AfiShepherd system improves all major aspects of sheep and goat farming. For example, it increases herd productivity by identifying non-productive animals for culling. Further, the system enables branch specialization by gathering the most productive animals and breeding the best milk producers. Thus, guaranteeing that every group of animals receives its optimal ration, AfiShepherd optimizes feed consumption, and by enabling genetic improvement, enhances individual animal production. The ICAR- approved AfiFree milk meter also monitors the quality of the milk with conductivity measurement.

The Afimilk solution for the sheep and goat market has been sold successfully worldwide, particularly in Mediterranean countries, where the company has strong connections to breeding associations. Afimilk systems are at work in more than 50 countries on five continents. Kibbutz Afikim and Fortissimo Capital, Israel's leading private equity firm, are the two shareholders in Afimilk (http://www.afimilk.com). (Afimilk 21.02)

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8.7 ApiFix Receives CE Mark for its Innovative Scoliosis Treatment System

ApiFix recently received CE Mark for its minimally invasive treatment system for Adolescent Idiopathic Scoliosis (AIS). ApiFix also reports that it has successfully completed a pilot clinical trial with positive results. The revolutionary ApiFix AIS correction system minimizes risk, pain and scarring for the patient; and speeds recovery time. The shorter, simpler procedure costs less, as well. In the ApiFix system, a small implant is attached to the center of the main spinal curvature using only two screws, resulting a 10 cm scar, compared to over 40 cm scar in the standard procedure. After recovering from surgery, which takes only about an hour, the patient undergoes physical therapy treatments, during which the implant is gradually "educating" the spine into a correct position and "remembers" and reinforces each correction made. Misgav’s ApiFix (http://www.apifix.com) was founded in 2010 and has received investment from The Trendlines Group, Israel's premier seed-stage investment group. The company began controlled clinical trials in Europe that will continue throughout 2012 and 2013.

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8.8 Expanding Orthopedics Evaluates XPED Expanding Pedicle Screw System

Expanding Orthopedics has started to enroll patients in Germany for its multi-center post-market study to evaluate the performance and usability of the XPED Expanding Pedicle Screw System. Up to 50 patients will be enrolled in this multi-center study and will be followed for up to 24 months using pain and quality-of-life questionnaires as well as radiographic assessments. Screw loosening is a frequent complication associated with pedicle screw fixation in weak bone and can lead to a revision surgical treatment. The unique XPED Expanding Pedicle Screw System has been designed to offer improved anchoring of the implant in the vertebral body. Or Akiva’s Expanding Orthopedics (http://www.xortho.com) is a private, venture backed company whose mission is to develop innovative orthopedic products for unmet needs, improve long-term patients' outcome. EOI owns a broad IP portfolio around expandable devices delivered through a minimal invasive approach. (Expanding Orthopedics 26.02)

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9:  ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1  Samsung & SodaStream Four-Door Refrigerator with Sparkling Water Dispenser

Samsung Electronics announced that it is bringing the premium taste of fresh, crisp sparkling water right to the kitchen with the Samsung RF31FMESBSR 36” Four-Door Refrigerator featuring the industry’s first-ever automatic sparkling water dispenser. Powered by SodaStream, the recognized leader in personalized carbonation technology, the integrated system delivers cold, filtered sparkling water from the same mechanism on the refrigerator door that produces still water and ice. With the new Samsung Four-Door Refrigerator with sparkling water dispenser, getting the crisp delicious taste of sparkling water is as easy as pushing a button. Using the same control panel they would use to select between water or ice, consumers can select up to three levels of carbonation for their sparkling water, giving them just what they are looking for to quench their thirst. The sparkling water dispenser uses a standard SodaStream 60L CO2 cylinder that rests in a small, concealed area inside the left refrigerator door, which is easily accessible to change when empty.

With the addition of the sparkling water dispenser, consumers can save space in the refrigerator that was previously allocated toward bottled carbonated beverages and reduce bottle waste in the home overall. In addition, consumers will ultimately save money that was used to purchase carbonated beverages, all while enjoying the convenience of getting sparkling water at the touch of a button. Airport City’s SodaStream (http://www.sodastream.com) is the world’s leading manufacturer and distributor of home beverage carbonation systems which enable consumers to easily transform ordinary tap water instantly into carbonated soft drinks and sparkling water. (Samsung Electronics 14.02)

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9.2  NASDAQ OMX NLX Selects Mellanox’s InfiniBand Solutions

Mellanox Technologies announced that its industry and performance-leading InfiniBand solutions have been selected by NASDAQ OMX NLX to enable fast, reliable trading. NLX, the new London derivatives market, will offer a range of both short- and long-term interest rate (STIRs and LTIRs) euro- and sterling-based listed derivatives products, subject to Financial Services Authority approval. InfiniBand will act as the server interconnect for NLX’s matching engines. In addition to Mellanox’s InfiniBand interconnect solutions, NASDAQ OMX NLX will use Mellanox’s VMA messaging accelerator to cut 60-to-70% of the server-to-server latency and eliminate jitter. Yokneam’s Mellanox Technologies (http://www.mellanox.com) is a leading supplier of end-to-end InfiniBand and Ethernet interconnect solutions and services for servers and storage. Mellanox interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance capability. (Mellanox 14.02)

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9.3  Mellanox 10/40Gb/s Ethernet Solutions Boost OpenStack Performance

Mellanox Technologies announced availability of hardware-based network virtualization and storage acceleration solutions for OpenStack-based public and private clouds. Using Mellanox 10/40GbE NICs and switches and the OpenStack Quantum plug-in, customers can deploy an embedded virtual switch (eSwitch) to run virtual machine traffic with bare-metal performance, provide hardened security and QoS, all with simpler management through Software Defined Networking (SDN) and OpenFlow APIs. Using Mellanox’s eSwitch approach, virtual machines can run with 20X lower messaging latency, consume less CPU resources and gain native access to hardware offloads and RDMA. In addition, Mellanox provides an OpenStack Storage (Cinder) plug-in that allows users to run storage volume traffic over native RDMA transport, providing 5X faster throughput over standard TCP/IP, while significantly increasing infrastructure efficiency by using less CPU resources.

Yokneam’s Mellanox Technologies (http://www.mellanox.com) is a leading supplier of end-to-end InfiniBand and Ethernet interconnect solutions and services for servers and storage. Mellanox interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance capability. (Mellanox 13.02)

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9.4  With $1.3 Million Funding, Getonic Unveils New Social-Viral Shopping Platform

Getonic has raised more than $1.3 million in total funding for its service that gives small businesses and stores a unique set of tools to build mini online shops that they can post to the web and social feeds. The startup has developed a unique mini-ecommerce platform. Users build stores, called POPshops, which are a new kind of social widget and let businesses promote and sell their products and services directly from the Facebook timeline and other social channels. Additionally, the POPshops include a unique viral-affiliate program that encourages users to share them with their friends. The company has just released a redesigned version of the platform with multiple new features for its users. While traditional online stores are a good solution for customers who are searching for a specific product or service, they don’t effectively address impulse purchases. Getonic is looking to solve this problem through its simple end-to-end solution. The service gives businesses an easy-to-use dashboard where they can create their own POPshop in seconds. Businesses simply need to select the product or service they want to sell, add a price, customize the look and feel of the POPshop, and that’s it. With a click of a button they can post it to Facebook, Twitter, a blog, email or the web.

Founded in 2010, Tel Aviv’s Getonic (http://www.getonic.com) provides businesses with a platform to create social-viral stores called POPshops. These mini-online stores let users make purchases directly from the social-feeds and to receive potential rewards when they share the stores with their friends. (Getonic 13.02)

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9.5  Mellanox FDR 56Gb/s InfiniBand Accelerates Fastest Supercomputer in India

Mellanox Technologies announced that India’s Centre for Development of Advanced Computing (C-DAC) utilizes Mellanox’s end-to-end FDR 56Gb/s InfiniBand solution to provide leading server and storage application performance for PARAM Yuva – II; India’s fastest supercomputer. C-DAC is the premier R&D organization of the Department of Electronics and Information Technology (DeitY), Ministry of Communications & Information Technology (MCIT) for carrying out R&D in IT, electronics and associated areas. Launched on 8 February, PARAM Yuva – II provides more than half a Petaflop of raw compute power using hybrid compute technology with compute co-processor and hardware accelerators. C-DAC chose Mellanox’s robust, high-speed interconnect solution due to its performance, scalability, low power consumption, and high-efficiency data handling.

Yokneam’s Mellanox Technologies (http://www.mellanox.com) is a leading supplier of end-to-end InfiniBand and Ethernet interconnect solutions and services for servers and storage. Mellanox interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance capability. (Mellanox 19.02)

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9.6  Silicom’s Patent-Pending Intelligent Time-Stamping Adapter

Silicom launched a new family of Intelligent Nano-Second Time-Stamping NICS, a breakthrough enabler of next-generation network monitoring in Big Data environments, and that it has already secured an immediate Design Win for the product line’s first adapter. Based on patent-pending technology and an innovative new concept, Silicom’s adapters combine Intel’s networking silicon and the Company’s proprietary time-stamping FPGA (field programmable gate array), working at wire speed to time-imprint packets at the industry’s highest resolution and accuracy. The time-stamping solution’s unique architecture enables it to outperform the competition with a broad range of advantages, including the full feature-set of Intel’s networking silicon, much lower power consumption and much higher fan-less reliability – all at a very competitive price.

Kfar Saba’s Silicom (http://www.silicom.co.il) is an industry-leading provider of high-performance networking and data infrastructure solutions. Designed primarily to increase data center efficiency, Silicom’s solutions dramatically improve the throughput and availability of networking appliances and other server-based systems. Silicom’s products are used by a large and growing base of OEM customers, many of whom are market leaders, as performance-boosting solutions for their offerings in the Application Delivery, WAN Optimization, Security and other mission-critical segments within the fast-growing virtualization, cloud computing and big data markets. (Silicom 19.02)

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9.7  Eveready Uses Panaya to Reduce Oracle EBS Upgrade Project

Eveready Industries India Limited, the third largest producer of carbon zinc batteries in the world and Panaya, the largest ERP test and upgrades automation SaaS provider, announced today that Eveready has successfully upgraded its Oracle EBS 11.5.X platform to R12.1.3 using Panaya’s technology, saving 60% in project duration, reducing code corrections by 50% and saving tens of thousands of dollars on outsourcing costs. Once Panaya was brought in, the upgrade project was over in two months, cutting the projected project duration by six months – a 60% reduction. Panaya also saved Eveready 50% on code corrections, 50% on unit testing, and $60,000 in outsourcing costs. Because Eveready didn't need to outsource their testing and code corrections, they were able to better control the project.

Ra’anana’s Panaya's (http://www.panayainc.com) software-as-a-service helps companies that use SAP or Oracle reduce 70% of their upgrade and testing risk and effort. Panaya's testing solutions dramatically expedite ERP testing and eliminate the need for manual test script maintenance. Seamlessly capturing business knowledge in the background, as users work with the ERP applications, Panaya automatically generates plain-English test scripts that are rapidly executed and continually self-adjust based on test results. (Panaya 19.02)

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9.8  CommuniTake Multi-Channel Support Capabilities Power Holistic Care Approach

CommuniTake launched the industry’s most advanced and complete support platform leveraging unique remote access technology. The new platform offers great potential as it is fundamentally changing the way service providers can realize increased support productivity and reduced costs by using multi-channel care approach. These solutions augment the already established components including (1) On-Device Repair application that provides constant real-time device testing and auto repair, (2) smart enterprise mobility management platform and (3) complete remote control over mobile devices, including Android devices, with no on-device prerequisites. Yokneam’s CommuniTake (http://www.communitake.com) is recognized as a front-runner in remote access and remote control technology for mobile devices. It established an industry first by combining advanced enterprise mobility solutions with a full remote support stack. The CommuniTake products have been implemented at leading service providers and global corporations. (CommuniTake 19.02)

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9.9  NICE Mobile Reach Selected by Telefónica to Provide Customer Service

NICE Systems’ NICE Mobile Reach, a solution for mobile customer service, was selected for initial deployment by Movistar, Spain's largest telecommunications operator and a brand of Telefónica Spain, one of the world's foremost international communications companies. The solution will serve as a bridge between Movistar's self-service mobile app and the contact center, engaging customers based on their intent, profile, and the context of the interaction. With NICE Mobile Reach, Movistar will increase customer engagement, improve customer satisfaction and provide efficient and effective assisted service across channels. NICE Mobile Reach enables Movistar customers to seamlessly transition from the mobile app to assisted service with an agent. When a customer selects this option, all information about the customer's activities in the mobile application will be automatically transferred to the contact center and immediately displayed on the agent desktop. The Movistar agent will be able to use the interaction context to immediately start helping the customer in a highly personalized way. Multimedia collaboration options, such as image exchange, will further boost the quick and efficient resolution of the customer's issue, improving first contact resolution rates and increasing customer satisfaction.

Ra’anana’s NICE Systems (http://www.nice.com) is the worldwide leading provider of software solutions that enable organizations to take the next best action in order to improve customer experience and business results, ensure compliance, fight financial crime and safeguard people and assets. NICE's solutions empower organizations to capture, analyze, and apply, in real time, insights from both structured and unstructured Big Data. (NICE 19.02)

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9.10  Accel Telecom Launches First Standalone Connected Car Smartphone

Accel Telecom officially launched VOYAGER, the ultimate Connected Car Smartphone device. VOYAGER is the first standalone Connected Car Smartphone device that can be easily installed in any car and operates using an existing phone number via a twin-SIM. VOYAGER is a dedicated Connected Car Smartphone device that provides drivers with a safer and superior Connected Car experience. The device combines Android based Smartphone technology with an HSUPA Qualcomm module to deliver a driver centric device that ensures safer calling, easy navigation via a dedicated Waze launcher key and multiple car focused applications. VOYAGER is designed to enhance safe driving with hands-free dialing, dedicated large physical keys, crystal clear, echo free sound quality and an in-car 3G WiFi Hotspot connection among the many core features. VOYAGER also connects to the car on-board diagnostics (OBD) to allow car diagnostics, fleet management applications and more.

Tel Aviv’s Accel Telecom (http://www.accel.co.il) is a leader in the Israeli telecommunications market known for its ability to introduce the newest and most robust solutions in IP, wireless and cellular technologies to the telecom market. Accel works with leading telecom and mobile operators providing cutting edge communications solutions. (Accel 19.02)

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9.11  Siklu's Small Cell Backhaul System in Advanced Trials

Siklu Communication is in the advanced trial stage of its new EtherHaul-600T small cell backhaul system with leading mobile operators, including Vodafone Group. The EtherHaul-600T is an ultra-small all-outdoor small cell backhaul system operating in the unlicensed 57-66 GHz V-band spectrum. Its design enables rapid deployment anywhere from street lamps to rooftops, as service providers boost their network capacity through small cells in dense urban environments. Siklu’s EtherHaul-600T has undergone lab testing and outdoor performance testing with mobile operators, with the units' performance gauged at various distances. For example, Vodafone has now deployed several EtherHaul-600T links in a UK city's downtown area. The EtherHaul-600T units are deployed in a daisy chain to provide the backhaul for real-life traffic generated by small cells, monitoring the performance and availability of the links.

Petah Tikva’s Siklu (http://www.siklu.com) builds gigabit millimeter-wave wireless backhaul solutions over the 70-80 GHz E-band and 60 GHz V-band. Based on a unique all-silicon design that reduces price and increases reliability, Siklu's radios are ideal for LTE macro and small cell backhaul, fiber extension and business service delivery. The field-proven radios are the top choice of tier one operators for gigabit backhaul worldwide, and thousands of units have been deployed and are operating reliably in all weather conditions. (Siklu 21.02)

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9.12  Alvarion & Aptilo Collaborate to Market Mobile Data Offloading

Alvarion and Stockholm’s Aptilo Networks, the leading provider of mobile data offloading solutions, announced that the companies have successfully tested an end-to-end Wi-Fi mobile data offloading solution combining Alvarion’s carrier-grade WBSn family of Wi-Fi base stations with the Aptilo Service Management Platform and the Aptilo Access Controller. The companies intend to market the solution globally. Alvarion’s WBSn base stations feature leading radio technology including bi-directional Beamforming 802.11n, unique interference immunity suite, 3x3:3 MIMO and advanced antenna system, to provide high capacity and ubiquitous coverage in both 2.4 and 5 GHz with a low number of radio units. Supported by 802.1x security and EAP-SIM authentication, the WBSn base stations work seamlessly with Aptilo’s platform, which provides carrier-class Wi-Fi service management, SIM-based authentication towards HLR/HSS and integration with the 3G/LTE mobile core for policy and charging. Tel Aviv’s Alvarion (http://www.alvarion.com) provides optimized wireless broadband solutions addressing the connectivity, coverage and capacity challenges of telecom operators, smart cities, security and enterprise customers. (Alvarion 21.02)

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9.13 Wochit Launches Platform for Ever-Fresh Video Production

Wochit has launched its platform that provides web publishers with a constant supply of ever-fresh news video. The company’s platform produces videos practically in real-time, as stories break, combining large scale capabilities with high quality results. Publishers gain easy access to these videos, including through partnerships that Wochit has entered into with major distributors Grab Media, OneScreen and Rightster. Rich and timely content is vital for audiences to access through web sites, mobile applications, news organizations, blogs, and other media entities, and news videos are especially effective tools to engage audiences. Wochit can provide abundant news video about a publishing site’s particular topics of interest, including using that site’s own content, or about practically any currently trending subject. This opens new revenue opportunities for publishers, without requiring the expense or commitment of launching their own video production operations.

Wochit (http://www.wochit.com) produces ever-fresh, studio-quality news video content about any topic as it happens. Web sites, mobile applications, news services, blogs and other publishing entities can utilize the company's platform for new revenue opportunities and better audience engagement. By working with Wochit, a publisher effectively and economically achieves the effect of having its own newsroom for video production. Backed by major venture capital firms, Wochit is based in New York and Tel Aviv. (Wochit 20.02)

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9.14 EveryThink Unveils Personal Information Management App for the iPhone

Promising a productivity app that is actually useful, EveryThink launched the EveryThink App, a powerful suite of personal information management tools for the iPhone. Based on proven knowledge-representation theory, the EveryThink App integrates calendar functions and tasks, and syncs multiple calendars from every platform or source. EveryThink’s patent-pending Drag-hover-Drop (DhD) technology allows users to move items and information easily between calendars, tasks and time slots. This gives users a comprehensive, integrated and easy-to-use personal information management app that functions the way people actually think.

Tel Aviv’s EveryThink (http://www.everythink.us) has taken the best of knowledge management theory of the 21st century and integrated it into innovative, easy-to-use, personal information management solutions for the mobile world. Inspired by Apple’s iPhone vision with beautiful function and design, with earth-shaking usability, the EveryThink solution has tackled ways to transform the productivity design in the mobile environment. (EveryThink 20.02)

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9.15 New Earnix 6.0 Extends Limits of Financial Services Predictive Analytics

Earnix announced the release of Earnix version 6.0, the newest version of Earnix’s software delivering enhanced predictive modeling and decisioning tools designed specifically for the financial industry. Combining risk and demand modeling with real-time connectivity to core systems, Earnix provides an integrated customer analytics platform that empowers insurers and banks to optimize the alignment of products and prices to the demands of specific market segments, resulting in higher profitability and growth in hyper-competitive markets. The most significant change with Earnix 6.0 is the introduction of one-step Relational Optimization which provides a breakthrough in efficiency and accuracy of pricing of financial products that are composed of multiple sub-entities. Earnix 6.0 provides additional functionality enhancement in various categories including: an extension of real-time analytical interfaces, new segmentation options and additional regression types.

Ramat Gan’s Earnix’ (http://www.earnix.com) Integrated Pricing and Customer Analytics software empowers financial services companies to predict customer demand and its impact on business performance, enabling alignment of pricing and products with changing market dynamics. Earnix combines risk and demand modeling with real-time connectivity to core operational systems, bringing the power of analytic-driven decisions to every customer interaction. Leading banks and insurers worldwide rely on Earnix solutions to optimize deposit, loan and policy prices. (Earnix 19.02)

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9.16 MTS Delivers Mobile Money Solution

MTS - Mer Telemanagement Solutions announced the first deployments of its Mobile Money solution for a customer in Africa. MTS will provide the solution in a managed service/revenue share model with a minimum value of $460,000 over three year period. The Mobile Money solution targets the cellular users who do not have bank accounts and extends the MTS's MVNE offering. This solution will also be offered as standalone product to financial service providers (FSPs) and mobile network operators (MNOs). The solution provides financial services to s end users such as cash deposit, withdrawal, balance query, money transfers, goods purchases, remittances and bill payments, using their mobile phone. The Mobile Money solution supports customer access through different technologies (STK, SMS, USSD, Smart Phones App and Web) and manages the customer lifecycle, agents and merchant accounts. In addition, the MFS solution supports the management of budget accounts that allow the allocation and dedication of funds to purchase certain goods.

Ra'anana’s MTS (http://www.mtsint.com) is a worldwide provider of Telecom Expense Management (TEM), MVNE and Mobile Money services and solutions. MTS markets its solutions through wholly owned subsidiaries in the United States, Hong Kong and distribution channels. MTS shares are traded on the NASDAQ Capital Market. (MTS 21.02)

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9.17 Ethernity Networks Unveils a Virtual Fiber Backbone Over the Air

Ethernity Networks unveiled its 10Gbps Carrier Ethernet Virtual Fiber wireless backbone solution. Ethernity delivers unique packet transmission technology for carrier grade scalable 10G Virtual Fiber Backbone over the Air, in point to point and mesh network offering the use of off the shelf wireless technology while maximizing availability and scalability, using standard IP over Ethernet in oppose to proprietary microwave technologies. Ethernity offers solution that can aggregate multiple microwave (like Wi-Fi ) links to form a 10Gbps virtual link, where each link is directed in a way that will prevent interference between adjacent wireless links. Ethernity solution runs packets or single IP stream over multiple microwave links with the ability to transmit those packets over standard switches and construct the data to a single stream using frame reordering and jitter buffer technologies. Lod’s Ethernity Networks (http://www.ethernitynet.com) develops and provides System on a Chip, Carrier Grade Fabric Flow Processors for telecommunication and data communication platforms enabling the Programmable Network. The ENET architecture is based entirely on Ethernity technology which is protected by patents. Ethernity Networks' products target the Broadband Access, Mobile Backhaul and Metro Ethernet market spaces. (Ethernity Networks 21.02)

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9.18 GoNet’s Next Generation MIMO Beamforming Wi-Fi Platform

GoNet Systems announced its Next Generation xRF MIMO Beamforming Access Point Platforms - GoBeam 7000 and GoBeam 8000. With Next Generation Beamforming technology, GoBeam delivers x2-x4 the capacity and 90% effective noise mitigation in both indoor and outdoor deployments. The dual radio beamforming architecture that supports both 2.4 GHz and 5 GHz bands combined with a directional, automatic channel selection mechanism enables operators to optimize the frequency utilization. With a flexible architecture GoBeam platforms are designed to support the latest Wi-Fi standards including 802.11 a/b/g/n and beyond to 802.11ac. GoBeam features 2 product families: GoBeam 7000 indoor access point family and GoBeam 8000 outdoor access point family. Both product families feature a 120° sector access point and a 360° omni-directional access point. The GoBeam platforms leverage GoNet Systems Next Generation MIMO xRF Beamforming to create 3 distinct beam-formed streams. Each channel benefits from the enhanced beamforming performance and noise mitigation.

Tel Aviv’s GoNet Systems (http://www.gonetworks.com) provides beamforming Wi-Fi solutions for 3G/4G data offload, Wi-Fi access and enterprise networks. With Next Generation Beamforming technology, GoNet Systems GoBeam access points deliver x2-x4 the capacity and 90% effective noise mitigation in both indoor and outdoor deployments. GoNet 25.02)

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9.19 Carmit Candy Industries Presents a New Line of Fortified Confectionery

Carmit Candy Industries R&D team is developing a new line of functional confectionery products for specific health indications. The new line of fortified confectionery products are designed to provide specific health benefits while maintaining excellent taste and texture. For each health indication, ingredients are carefully selected for their scientific support, regulatory approval and technical parameters. The ingredients are then incorporated into one of the confectionery carriers such as chocolate coins, toffee-chews, crème-filled wafers and lollipops and undergo organoleptic and analytical testing-to ensure both ingredient stability and delicious taste. Some highlights of the new fortified confectionery product line are:

  • Weight-management wafer-bar with glucomannan and potato extract
  • Bone-health chocolate coin with calcium, vitamin D and vitamin K
  • Immune-health sugar-free toffee chew with echinacea, vitamin C and zinc

This product line offers new and exciting concepts for supplement companies looking to expand their product line and offer products with a tasty dose-form.

Rishon LeTzion’s Carmit (http://www.carmitcandy.com) is a leading private-label manufacturer for gluten-free, dairy-free and fortified confectionery and bakery products. Located in Israel, Carmit has a state-of-the art facility that produces chocolate coins, toffee-chews, crème-filled wafers, cookies and lollipops. (Carmit 26.02)

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9.20 N-trig DuoSense Pen2 Family for Smartphones & Tablets

N-trig released its second generation DuoSense Pen family. Available in models of 9.5mm, 8.0mm and 5.5mm diameter, the active pen solution employs high pressure sensitivity, hover and function buttons with advanced palm rejection, pursuing a natural writing experience for screen ink input. The DuoSensePen2 family offers OEMs the optimum size for smartphones, Ultrabooks and notebooks, in both rechargeable and battery-operated models. The 9.5mm diameter DuoSensePen2 is in volume production now, with engineering samples of the 8mm and 5.5mm DuoSensePen2 available in the upcoming months. Android and Windows systems using N-trig’s smaller diameter active pens will be shipping to the market later this year. Capitalizing on the company’s DuoSense technology, Kfar Saba’s N-trig (http://www.n-trig.com) offers the world’s first integrated pen and touch system-on-chip solution, providing mobile device OEMs with a compact, low-power solution that requires only a single digitizer (single sensor and controller) instead of two, thereby reducing R&D efforts and cost of ownership. N-trig’s solutions support Windows and Android-based smartphones, tablets and Ultrabooks. (N-trig 26.02)

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10:  ISRAEL ECONOMIC STATISTICS

10.1 Israeli Home Prices Rose 6.8% in 2012

Housing prices rose by 6.8% in 2012, and by 74.5% in nominal prices since May 2007, the Central Bureau of Statistics reported. It reported that home prices rose by 1% in December 2012, after rising 1.1% in November and 0.8% in October. Home prices fell in just one month last year (June) and even then by just 0.1%. Monthly prices rose by 1-1.1% in three months: April, November and December. The rise in home prices in 2012 followed the 2.76% rise in 2011, 12.8% gain in 2010, 19.6% gain in 2009 and 10% rise in 2008. (CBS 17.02)

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11:  IN DEPTH

11.1 ISRAEL: Israel Only Country In West To Reduce Debt

Israel is the only country in the West which has managed to reduce its debt as a proportion of GDP in 2012. The Israeli government's debt in the past year (which will be published soon) will total some 73.5% of GDP, compared to 74.1% of GDP in 2011 and 80% of GDP five years ago. In total, the State's debts today amount to NIS 720 billion (about $194 billion). The GDP is close to NIS 1 trillion ($267.5 billion).

Debt has increased in all Western countries in recent years, and in some it has even reached more than 100% of GDP. In the past four years, Britain's debt-to-GDP ratio has gone up by 48%, in Japan it has increased by 42%, and in the United States by 33%. The debt-to-ratio of all OECD countries has increased by 28%, in France it has gone up by 26%, in Germany – 19%, in Australia – 16%, and in Italy – 15%. Due to the ongoing decline in state debts, Israel is also the only country in the Western world whose credit rating has increased since 2008, when the subprime mortgage crisis broke out in the US. Meanwhile, the credit rating of the US, Britain, France, Austria, Belgium and Japan was cut due to a huge increase in debts.

In the Maastricht Treaty, signed upon the establishment of the European Union, countries were given permission to join the EU as long as their debts did not exceed 60% of GDP. That year, 1991, Israel's debts reached more than 100% of GDP. Now the Jewish state is moving closer to the European criterion, while many EU countries have deviated from it with debts exceeding 100% of GDP.

Only last month, Israel's dollar-denominated bond offering garnered demand of more than $9 billion from foreign investors and provided the government with its lowest ever funding costs in a dollar bond issue. (Ynet 26.02)

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11.2  JORDAN: Energy Price Rises Inevitable

Ongoing energy concerns continue to plague Jordanian manufacturers despite an overall resilient performance from the sector in 2012. As the country grapples with slow economic growth, subdued international investment and a mounting public budget deficit, industrialists are working to combat a new wave of electricity tariffs that have already contributed to a rise in production costs.

Jordan’s energy woes have long been documented, and once again came to the fore as the result of attacks on the Egyptian gas pipeline in El Arish over the past few years. This has led to government imports of fuel at an unsustainable cost to keep up with growing energy demand. The decision to lift fuel subsidies in November 2012 to comply with the parameters of the IMF’s reform program dented the pockets of Jordanians deeply, but the next step in receiving the IMF’s $2b credit access could prove even more crippling to local industry.

As the IMF loan’s main objective is to cut into the soaring public debt, the National Electricity Producing Company (NEPCO) has become the main target. According to Energy Minister Alaa Batayneh, a combination of price hikes and planned power outages will be necessary to close NEPCO’s JD2.38b ($3.35b) budget deficit. Local media has reported that prices are expected to rise 40% through 2017. Although Batayneh said the decision will ultimately be left to the new government, these measures seem unavoidable. Currently, NEPCO sells electricity to consumers at an average rate 60% lower than its JD0.188 ($0.26) per kilowatt hour generation cost.

This leaves Jordanian manufacturers concerned with their ability to stay competitive. As Nazzal Armouti, general manager of the Jordan Cypriot Construction Company, told OBG, “The industrial sector is a lifeline of the Jordan economy as it is the main source of exports, as well as a tremendous job creator”.

The industrial sector employs around 22% of the working population, according to the UN. Salim Karadsheh, CEO of the industrial conglomerate Nuqul Group, reiterated the harm that increased energy costs could bring to Jordan’s regional competitive balance, stating, “Industries in Jordan are at a competitive disadvantage because oil-rich countries in the region sell fuel to their domestic firms at subsidized, non-market prices”.

According to the Central Bank of Jordan, the manufacturing sector made up 20.4% of GDP at the end of 2011, and ramifications from the electricity hikes this past June, as high as 150% across some sectors, have already been felt. National exports dropped by 1.8% over the first seven months of 2012, the central bank reported, and there was an average increase of industrial producer prices by 5.3% over the first eight months of 2012.

“The central government’s choice was either to raise the prices of fuel or devalue the dinar,” Ayman Azzeh, the CEO of Red Sea Timber Industries, told OBG. “Neither solution is ideal, but the latter would be detrimental in Jordan’s quest to attract more external investment. Now the industrial sector must also get ready to brace itself for energy hikes of up to 40% between 2014 and 2017.”

The industrial sector does have a strong lobbying arm in the Jordan Chamber of Industry, which according to Armouti is in talks with the government to lessen the percentage of price hikes. Another medium-term solution will be a concerted effort by a number of entities to emphasize alternative and renewable energies. Jordan is one of the most sun-rich countries in the world, averaging more than 320 days of sun a year and many are looking towards photovoltaic technology once it becomes more cost-efficient. The country also has a number of promising oil-shale projects underway that could potentially render the kingdom self-sufficient in energy needs within the next decade.

Despite the challenges that lie ahead, the industrial sector does have much to be proud of. Its phosphate and potash industries, as well as fertilizer manufacturers, have continued to grow exceptionally well. Jordan’s exports in clothing and medical and pharmaceutical products have also remained strong. The industrial sector’s flexibility and diversity should equip it to ride out the storm. (OBG 18.02)

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11.3  GCC: Laboring Against Themselves

Suliman Al-Atiqi wrote in Sada (http://carnegieendowment.org/sada) that despite a rigorous private-sector labor nationalization campaign over the past decade (and some initial progress), the Arab uprisings of 2011 drove the governments of the Gulf Cooperation Council to implement a range of policies aimed at preventing the wave of regional revolutions from reaching Gulf shores - but ones which have ultimately reversed and contradicted earlier efforts to shift their citizens to the private sector.

The last decade has witnessed a great urgency among GCC governments to integrate its citizens further into the private sector. This resolve has been primarily propelled by an ever-increasing influx of migrant workers into the Gulf who contribute to an expat community of nearly one-third of the GCC population. Moreover, to address unemployment, Gulf governments have been forced to create low value-added jobs in the public sector, further contributing to an ever-growing web of bureaucracies. As a result, GCC labor ministries have adopted various private sector nationalization measures in an attempt to alter demographic imbalances. The policies were also an attempt to depart from the rentier system and reduce oil-revenue dependency for financing the majority of the citizens’ salaries. These efforts mostly comprise the enforcement of quotas for hiring citizens that private companies have to meet and penalizing non-compliance.

However, throughout 2011, GCC governments were scrambling to minimize potential mass upheaval - as in Bahrain - and introduced a range of policies aimed at placating their citizens. These policies were made possible by high oil prices, averaging at over $100 per barrel in 2011, induced by the regional unrest. Once implemented, though, they further incentivized careers in the public sector and alienated citizens working in the private sector.

Saudi Arabia responded to growing unrest by tapping into its vast oil revenues. King Abdullah attempted to appease the new generation as well as offset high inflation with a series of decrees (on February 23 and March 18, 2011) estimated to be worth $130 billion, or about 30% of the Kingdom’s annual GDP. With unemployment at least at 10% (estimated at 40% for the 20-24 age group), the King announced aid ($553/month) to the unemployed and the creation of more than 60,000 law-enforcement jobs for the ministry of interior. Furthermore, a two-month stipend for all students in public higher education was granted. But the real appeasers were a 15% wage increase and a one-time cash payment of two months’ salary to all government employees, or about 80% of all Saudi nationals. These policies, which privileged public-sector employees, generated a wave of complaints from their private sector counterparts. Recognizing the repercussions, Saudi business tycoon Prince Al Waleed Bin Talal (CEO of Kingdom Holding Company) even went so far as to match the king’s salary grant for his own employees and encouraged other businessmen to follow suit in support of the king’s initiative.

The Emir of Kuwait also preempted unrest by announcing in January 2011 a one-time grant of 1,000 Kuwaiti dinars ($3,600), worth a total of $4 billion, to every citizen, as well as free food staples for 18 months. Coincidently, the nation was also marking pre-planned fifty-year celebrations of the country’s independence, hence the generous bonus was ostensibly presented as a special Golden Jubilee “gift.” Nevertheless, thousands of public-sector employees, emboldened by the uprisings, went on strike to demand higher wages and more benefits. By February 2011, the government had already announced salary increases which ranged from 70-100% for law enforcement personnel (defense and interior) based on rank. When the government announced salary increases up to 66% in September for employees in the oil sector, labor unions (for example, those of Kuwait Airways and customs employees) intensified their efforts and went on strike to demand wage increases while the situation was ripe. The government relented, and by March 2012 it had announced a 25% public sector wage increase, amounting to higher pay for over 80% of the Kuwaiti workforce, as well as 12.5% increases in pensions.

Although Qatar witnessed no internal pressures during the 2011 uprisings, in September 2011 the world’s richest nation per capita announced an impressive 60% salary increase for all nationals working in the public sector, a staggering 92% of the national workforce. The emir’s decree also hiked the salaries of military officers by an astonishing 120%, while other ranks received a 50% increase.

The UAE was also no exception to the benefits announced throughout 2011 in the GCC. In November, the president announced that public sector workers (90% of UAE nationals hold government jobs) will see 35-45% increases in their salaries. The increases were set to take effect in January 2012 to coincide with the federation’s 40th anniversary and, as the state news agency put it, “to achieve the welfare of the citizens and help them get their ambitions in a stable and comfortable life.”

Other Gulf states - Bahrain and Oman - that witnessed waves of protests and violence were awarded $20 billion in aid from other GCC states to deal with their dissent. In the case of Oman, Sultan Qaboos weathered public demands and protests by increasing the “living allowance” of government employees by 100 Omani rials ($260) as well as increasing the pension of civil servants by 50%. Furthermore, the sultan announced the creation of 50,000 new government jobs, the establishment of a monthly benefit of $390 for the unemployed and an increase to the monthly financial allocations to students in public higher education. In Bahrain, the king announced a series of benefits mirroring other states, such public sector salary increases, pension increases and a new “Standard of Living Improvement” allowance for low-income employees. However, the tiny kingdom was not successful in overcoming its political crisis given its deeply seeded sectarian divisions.

While coverage of the 2011 Arab uprisings mainly focused on political developments, the GCC adopted a series of measures with socioeconomic consequences contrary to their long-term development goals. The unsustainable nature of these stopgap measures was captured perfectly by the Kuwaiti finance minister upon the government’s approval of salary increases in March 2012 when he warned that public sector wages have risen to 85% of the country’s oil revenues and that such salary hikes will continue to stifle efforts to incentivize work in the private sector. The short-term effects are already presenting themselves. Despite high economic growth in the GCC (real GDP growth reached 7.5% in 2011, the highest point since 2003) in 2011, Omani employees in the private sector were down by 4% in 2011 in contrast to 2010. In Kuwait, the number of nationals entering the public sector in 2011 nearly doubled from the previous year. A recent study also shows Qataris in the private sector dropped from 4% to 1.5% over the last 20 years.

Thus, despite efforts to encourage citizens to shift to private sector jobs, the adopted responses to the uprisings of 2011 have only reinforced the culture of state-dependency and the general impression that GCC citizens are better off in the public sector. This will make it more difficult for private companies to entice and retain talented citizens as employees when government jobs offer more attractive incentives: shorter working hours, job security (GCC citizens are rarely laid off), and, of course, increasing wages.

Suliman Al-Atiqi is an international affairs analyst from Kuwait. (Sada 26.02)

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11.4  UAE: Abu Dhabi New Farming Methods Give Local Crops a Boost

Efforts to raise the profile of farmers and their produce in Abu Dhabi are gathering strength as the emirate steps up its bid to generate greater food production. Addressing the challenges stemming from the UAE’s arid climate and limited water supply forms a key component of the emirate’s agriculture drive and is expected to facilitate Abu Dhabi’s plans to roll out extensive development projects in the coming years.

The emirate has begun growing vegetables and plants using methods that require less water, according to the Abu Dhabi Food Control Authority (ADFCA). It has also stepped up conservation efforts, recycling irrigation water and using it more effectively, while taking steps to prevent leaks and evaporation. “In addition to these, we are conducting several programs to create and strengthen awareness among farmers and farm owners about how the right use of technology can contribute to higher productivity, higher incomes from farming and reduced time spent on cultivation,” Rashed Mohamed Al Shariqi, the director-general of ADFCA, told OBG.

At present, water used for agriculture and afforestation accounts for 76% of Abu Dhabi’s total consumption, according to ADFCA. Some 48% of the emirate’s water goes towards farm irrigation, while 23% is channeled into afforestation. Around 5% is used in gardens and parks. The demand for water is expected to increase by 123% by 2030 as Abu Dhabi pushes ahead with its development plans.

Al Shariqi told OBG that the agency was working with the Abu Dhabi Farmers’ Services Centre (ADFSC), a country-wide education resource for farmers, to boost productivity by using farming areas more efficiently. “In 2010-11, for example, intensive methods produced high-quality potatoes which were cultivated in the Western Region,” he said.

Farmers who took part in the program saw their potato crops more than double, rising to 44,000 vegetables per hectare (ha) up from 20,000, with productivity per ha increasing from 10-15 tonnes of potatoes to 38 tonnes. The volume of water required to grow a kilo of potatoes dropped to 154 liters, down from 640, through the use of efficient irrigation methods.

A recent study showing that 13% of soil in the UAE is suitable for irrigated farming should bolster the emirates’ efforts to expand the agricultural industry and promote local produce, particularly in Abu Dhabi, which was found to hold more than 5% of the country’s potential agricultural land. The findings of the two-year soil study, revealed in December, are expected to help the UAE attract new investment for agricultural initiatives and address problems caused by degradation of land and natural resources.

The emirate’s bid to build a better local network of food production has also raised awareness among consumers about both food security and safety. In its campaigns, the ADFSC has highlighted the benefits of buying local meat and animal foodstuffs from a traceable source, pointing out that reducing the number of stages involved in handling produce helped lower the risk of food-borne diseases.

Industry players acknowledge, however, that consumers will be looking for produce that holds its own against international foodstuffs. “The community wants local products,” said Chris Hirst, the CEO of ADFSC, told regional media. “However, shoppers aren’t going to buy vegetables or meat just because they’re local. They have to be as good, or better, than the imported [items].”

Efforts to boost production have also led to local companies investing in farmland abroad to ensure the emirates are supplied with essential foodstuffs. The UAE-based firm Al Dahra Agriculture, which is the biggest supplier of hay, rice and other essential commodities to the emirates, has channeled funds into various investments aimed at cultivating agricultural lands for long-term food security. The company announced in January that it would become the majority shareholder in eight Serbian farming corporations that own some 14,000 ha of farmland.

“By investing in acquiring and developing agricultural lands outside the emirates, the UAE can alleviate the pressure on water security and contribute to executing the nation’s vision for food security. At the same time, we are creating a stable and consistent supply of human food and animal feed by integrating the supply chain and retaining control of all aspects of the production-supply process,” Khadim Al Darei, the vice-chairman of Al Dahra Agriculture, told OBG.

Projects aimed at boosting local produce alongside increased demand from consumers have also highlighted the scope for expansion in Abu Dhabi’s agricultural industry. The new soil findings should strengthen the emirate’s hopes of attracting investors for a broad range of planning and development initiatives across the sector. (OBG 12.02)

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11.5  OMAN: New Blueprint for Tourism

An extensive study to develop a long-term strategy for tourism is underway in Oman after the minister responsible for the sector acknowledged that although solid progress had been made in recent years, the industry has not yet reached its full potential. Addressing a session of the Omani Shura Council in late December, Tourism Minister Ahmed Bin Nasser Al Mehrzi said his ministry was laying the groundwork for a comprehensive, long-term strategy, and would soon contract an international agency to perform a detailed assessment of the current state of the sector. The study is expected to entail a review of all facilities, supporting services and the potential of proposed projects, he said.

Explaining the need for the review, the minister said, “There was no clear vision for the sector, so the government began evaluating it to find out why it did not reach its set goals and decided to create a long-term strategy for the next 30 years.”

This assessment and planning process, which Al Mehrzi said would take up to three years, is expected to focus on both domestic and international tourism. Combined with a lack of a blueprint for the future, Al Mehrzi said weaknesses in basic infrastructure and services were also holding back tourism in Oman, and that these issues would be addressed in both short-term developments and through the longer-term strategy.

However, despite the state having invested some OR100m ($259.7m) in the sector over the past few years, Al Mehrzi said returns from these investments had not lived up to expectations to date. The minister added that revenue from domestic tourism reached OR800m ($2b) since the current five-year plan, from 2011 to 2015, was enacted. International tourism, by contrast, brought in OR140m ($363.6m) in the same period.

While it has yet to roll out its new long-term vision, the ministry has already set a number of ambitious medium-term goals for the sector, including increasing the Sultanate’s hotel room stock from around 12,000 to 20,000 by 2015 and increasing arrival numbers from the present level of around 1.5m to 12m by 2020.

Progress in recent years has been good. Indeed, in 2012, tourism saw positive indicators across the board. The tourism sector represented 3% of GDP last year, or OR768.9m ($2b), according to the London-based World Travel & Tourism Council (WTTC). That was up by 5.8% on 2011, outpacing the 3.1% average growth in the Middle East region.

However, the WTTC is somewhat less optimistic about Oman’s medium-term prospects. The council has forecast that Oman will host some 2.83m inbound tourists in 2022, and while this is well up on the 1.6m it estimated for 2012, it does suggest the government may fall well short of its 12m target for 2020.

The state is investing heavily in supporting infrastructure, increasing capacity at most of the main airports and building subsidiary aviation hubs in regions not regularly served by passenger flights. These projects, some of which are already in progress and others set to begin over the coming years, will provide a boost to the Omani construction sector, as well as the accelerated program of hotel building aimed at increasing room numbers.

Though the state is supporting hotel development, private investment – both local and foreign – is needed to boost room stocks and tourism facilities to the level expected by the government. In this, Oman is in competition with other countries in the region. While the WTTC report said there had been a total of $1b of investments in the travel and tourism sector in 2011, this amount was low when compared to the $20.8b that flowed into the UAE, or the $5.3b invested in Saudi Arabia.

Currently, revenue from the tourism industry is weighted towards the domestic segment, with both earnings and visitor numbers strongly favoring local, rather than foreign, visitors. (OBG 12.02)

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11.6  OMAN: Budget Boost for Education

The government in Oman is channeling extra funding into education as part of a broader bid to provide its younger generations with the skills and qualifications needed to work in the modern economy. However, although the additional resources are a welcome step toward tackling key issues, such as improving students’ English language skills, it will take time for the benefits to trickle down into the economy.

Education and training were awarded $3.38b, or 10% of all projected state spending in Oman’s budget for 2013, which was announced in January, up 25% in real terms on last year. The government’s decision to increase its focus on education comes at a time when Oman’s private sector is struggling to fill vacancies, despite high unemployment in many regions.

According to the Public Authority for Manpower Register, more than 150,000 Omanis are currently registered as out of work. A national campaign aimed at encouraging the private sector to hire more Omanis has been only partially successful, with employers citing a lack of skilled and qualified local staff as their main reason for hiring expatriates.

High turnover also remains a problem, with figures from the Ministry of Manpower showing that almost half of the 410,000 locals who took up employment in the private sector between 2006 and 2011 either resigned or were dismissed. Sheikh Abdullah Bin Nasser Al Bakri, the Minister of Manpower, said studies indicated there were a number of reasons for high levels of employee movement, including limited opportunities for career advancement, a preference for working in the public sector, difficulties in adapting to the work environment and an inadequate grasp of the English language.

Weak English has also been identified as one of the reasons why almost half of students at the Sultan Qaboos University (SQU) do not complete their courses in the allotted time span, with some having to undertake additional language studies to meet the university’s requirements.

A two-year study conducted by the university found that just 14% of new students in 2011 achieved a pass mark in the English language test, and a considerable number perform less than satisfactorily in foundation program placement tests. Otherine Neisler, a research consultant with the College of Education at SQU who co-authored the study, said the findings of the survey would be shared with other educational institutions, offering a means of better assessing the needs of their students and helping them to determine where reinforcement might be required.

Good English skills have long been recognized as crucial for workers operating in an increasingly global economy, particularly in the oil and gas industry, which is Oman’s leading source of revenue. Observers anticipate that the number of international education providers in Oman will grow over the next few years, as the Sultanate targets improving standards in academia in preparation for meeting economic demands. The government is also expected to channel additional teaching resources into pre-university level education.

Another area pinpointed by experts as requiring attention is Oman’s use of technology in higher education. Professor Thomas Andersson, a senior advisor of the Research Council of Oman, the Sultanate’s main policy making and funding agency for research, highlighted the issue in an interview carried by the Oman Tribune on December 25. “Oman is doing a lot to invest in education, but unless it takes steps to draw on technology and get a handle on research and innovation, it cannot add value to education,” he said.

Andersson urged universities to invest in new ideas, develop their own identity and interact more fully with the private sector, which he said would help promote a more vibrant learning culture and increase efficiency. “Universities must move from mere education and teaching, to more innovation and creativity. There has to be an ecosystem of people and resources,” he concluded.

Ensuring that investment reaches specific areas of learning is one of many challenges the government faces in its bid to bridge gaps across the education system. However, many will view the increase in funding as a sign that efforts to provide Omanis with an education better tailored to the requirements of the global economy are gathering momentum. (OBG 21.02)

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11.7  EGYPT: Moody's Downgrades Government Bond Rating to B3

On 12 February, Moody's Investors Service (http://www.moodys.com/) downgraded Egypt's government bond ratings to B3 from B2, while maintaining the rating on review for further possible downgrade. This one-notch downgrade was prompted by the following factors:

1) The economic impact of the intensification of civil unrest, as reflected by the recent decree announcing a state of emergency.

2) The further weakening in Egypt's external payments position given the large drop in January in the level of international reserves held by the Central Bank of Egypt (CBE).

3) The continued uncertainty surrounding the Egyptian government's ability to secure financial support from the International Monetary Fund (IMF).

As part of today's rating action, Moody's has also lowered the B3 country ceiling for foreign-currency bank deposits by one notch to Caa1, the Ba3 country ceiling for foreign-currency bonds by one notch to B1, and the Ba1 local-currency bond and deposit ceilings also by one notch to Ba2. The short-term country ceiling for foreign-currency bonds remains unaffected at Not-Prime (NP).

Ratings Rationale

The main factor behind Moody's decision to downgrade Egypt's government bond ratings is the country's ongoing unsettled political conditions and recent escalation of civil unrest in the form of violent clashes between protesters and security forces, resulting in many deaths. This situation culminated in President Morsi's declaration of a state of emergency in three Egyptian cities along the Suez Canal on 27 January. Moreover, the polarization and divide between the democratically elected government and those in opposition appears to be deepening, thereby casting doubt over the government's ability to govern effectively, restore social stability and avert a worsening of the already severe economic disruptions.

The second factor underlying Moody's one-notch downgrade is the further weakening in Egypt's strained external payments position. In January, the country's international reserves dropped by $1.4 billion to $13.6 billion, the largest decline in 12 months and a sharp departure from the semblance of stability seen throughout most of 2012. This has occurred despite the deposits made to the CBE by the governments of Saudi Arabia and Qatar, and despite the CBE's imposition of selected capital controls on 30 December 2012, with the aim of limiting foreign-currency cash withdrawals and cross-border transfers for current transactions. Strains in the balance of payments are reflected in the depreciation of around 8% against the dollar that resulted from the greater exchange-rate flexibility brought about by the introduction of capital controls.

The third driver underpinning the rating action and the maintenance of the review for further possible downgrade of Egypt's sovereign bond rating is the government's postponement of a preliminary, staff-level agreement that was reached with the IMF in mid-December. This credit-negative delay jeopardizes the fragile stability that the country has slowly rebuilt in recent months, because an IMF program would have directly provided $4.8 billion in financial support and, more importantly, would have helped to shore up investor confidence through a monitored program of economic reform. Although the IMF and Egyptian government expressed their commitment on 7 January 2013 to pursue a new agreement, Moody's notes that the political challenges facing the government complicate both the reaching of an agreement with the IMF, as well as the ability of the government to adhere to a program of fiscal austerity, even if only gradually and cautiously.

Focus of The Review For Further Possible Downgrade

Moody's will monitor the evolution of the above factors to assess whether to implement a further downgrade of Egypt's government bond rating or to confirm it at its newly adjusted B3 level. Egypt's rating could be downgraded further, depending on the severity of possible adverse developments, in the event of one or a combination of the following factors:

1) The absence of substantial and predictable external financing support;

2) an assessment of a likely further weakening of the external payments position and further run-down of official international reserves;

3) instability in the banking system, which may prompt the imposition of tighter capital controls on domestic deposits or foreign-exchange transactions; or

4) a sharp rise in the government's funding costs above previously elevated levels to a level that significantly heightens refinancing risks.

Moody's would consider leaving Egypt's rating unchanged and confirming it at its current level in the event of:

1) A sustained strengthening in the balance of payments and external payments position -- in particular, a replenishing trend in the country's official international reserves.

2) A reduction in government debt-financing costs.

3) A sustained recovery in Egypt's economic growth towards pre-revolution trends.

4) Success in securing an IMF support program, which would likely be complemented by augmented financial support from western and regional governments. (Moody’s 12.02)

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11.8  EGYPT: Railway Plans on Track

In the wake of a tragic train accident at the beginning of 2013, Egypt is looking to step up investment in its railways to improve safety, and upgrade infrastructure and rolling stock. Plans for the development of new tracks are also being implemented with international support.

The government may look to spend up to LE45b ($6.68b) on upgrading the national railway network, according to Mohamed Sadek Sherbini, chairman of the transport committee of the Shura Council, the upper house of parliament, the regional press reported on January 16. Sherbini said LE15b ($2.23b) could be invested in safety equipment and automatic controls to reduce the risk of human error, and a further LE30b ($4.46b) for “renewal and development”, including new trains and the development of routes, particularly in Upper Egypt.

Sherbini was speaking after 19 soldiers were killed and more than 120 injured when a train travelling from Upper Egypt to Cairo derailed at the Badrashin station in Giza, a suburb of the capital. At the time of publishing, investigators were still trying to discover what caused the accident, but such events are not uncommon on Egypt’s extensive but poorly maintained rail system.

A recent report by the Ministry of Transportation suggested there are around 550 railway accidents each year. While the vast majority of these are minor, many people have been wounded or killed in recent years. A collision between a train and a school bus, which left 50 people dead in 2012, led to the resignation of the then-transport minister.

His replacement, Hatem Abdel Latif, was appointed by President Mohammed Morsi on January 9 with a specific brief to improve rail safety. The president has asked Latif to draw up a long-term plan for managing the railway sector. One of the minister’s first moves was to sign a deal for buying 221 new carriages; he says that 80-85% of the 3300 carriages currently owned by Egyptian National Railways (ENR) are past their life expectancy.

As well as the urgent priority of tackling safety issues and upgrading the rolling stock, this year should also see substantial investments in new track and staff. On January 9, the regional press reported that the Egyptian Railway Authority (ERA) would start the process of developing a new electric railway system connecting Cairo with Alexandria in March. The following month, the authority expects to hold an auction for the construction of a 250-km, $600m railway line from Beni Suef to Asyut in the north of the country.

Both projects are being funded by a loan from the World Bank and are part of a five-year development plan for Egypt’s railways. The $270m Cairo-Alexandria line is expected to be completed within four years, while construction on the Beni Suef-Asyut stretch should start in January 2014, once the ERA obtains a $330m loan from the World Bank. Applicants will be qualified and vetted by the authority with World Bank support.

The ERA is now also seeking further funds to construct a line from Zagazig in the Nile Delta to Cairo, which would link to an existing track from Zagazig to Port Said on the Mediterranean, near the entrance to the Suez Canal. The authority is extending the bidding period for the construction of 150 new stations to February, after some bidders requested more time.

Investment in railways is certainly capital-intensive, and the high cost of maintaining and consistently improving Egypt’s extensive network of 6700 km goes some way to explaining the system’s challenges. However, investment can pay off, not only in enhancing safety and saving lives but in lowering transport costs for the country as a whole.

Rail transport is usually significantly cheaper than road transport, a fact that will not be lost on Egypt’s growing industrial sector; the numerous and sizeable investments planned by Gulf states in railways indicates that the age of rail is far from over. Furthermore, good railways take pressure off roads, something that would be beneficial for Egypt, particularly in crowded urban areas such as Cairo.

Given the cost of developing rail, Egypt may need to look to tapping more international sources of funding, and perhaps also consider using an element of private financing and ownership. Over the longer term, the country may need a network that is smaller, but more efficient and focused on areas of high population and industrial development. (OBG 15.02)

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11.9 TUNISIA & LEBANON: A Tale of Two Assassinations

On 14 February, Khaled Chouket wrote in the Fikra Forum that for some in Tunisia, the degree of resemblance between the assassination of Tunisian liberal opposition leader Chokri Belaid on February 6, 2013, and the assassination of former Lebanese prime minister Rafiq Hariri on February 14, 2005, is disconcerting. With the anniversary of Hariri’s death upon us, Tunisian politicians grappling with a solution to the current political crisis should view the comparison with Lebanon as a cautionary tale of what is at stake if they cannot reach a compromise.

Lebanon and Tunisia occupy opposite ends of the spectrum in the Arab world: Lebanon is the epitome of religious sectarianism and nationalism, while Tunisia is the most homogenous of the Arab countries in its linguistic, religious and ethnic composition. Yet, despite this stark sectarian contrast, they are currently the two Arab countries that are most similar. Both are small, green, agricultural countries that share roots from the Phoenician empire. Both governments are independent, are typically classified as modern and tourism occupies an essential place in the economic foundation of both countries.

Beyond these fundamentals, similarities can be drawn between Lebanon’s Cedar Revolution and Tunisia’s Jasmine Revolution. The Lebanese revolution broke out in 2005 against its Syrian occupier which, for many years, hollowed out the Lebanese democratic system and made it into a caricature, a shell through which Damascus appointed the top three Lebanese officials: president, prime minister and speaker of the parliament. The Jasmine Revolution erupted on December 17, 2010, and culminated in the expulsion of President Ben Ali, who similarly ravaged the Tunisian democratic system and made it a mere decorative façade for a horrifying dictatorship.

In both countries, the assassinations of key political figures resulted in the splintering of the political system. The assassination of Rafiq Hariri split Lebanon’s political class into two conflicting camps: the April 8 coalition led by Damascus-leaning Hezbollah and the April 14 coalition led by the Future Movement, which is opposed to Syrian and Iranian hegemony. Similarly, in Tunisia, it would appear that the assassination of Chokri Belaid is on its way to further polarizing the already divided political spectrum: the February 8 comprising liberal, leftist and modernist forces, and the February 9 coalition led by the Islamist Ennahdha party, which includes a number of Islamist parties such as Hizb al-Tahrir and some Salafi groups.

It did not escape Tunisia experts that the signs of political polarization began to emerge after Ennahdha gained the seat of power. The division is rooted in the stark difference of opinion over the nature of the state, polarizing Tunisians between the “religious state” camp and the “civil state” camp. It is likely that the conflict between these two camps will be open, severe and perhaps bloody through the months and years to come.

Prior to the announcement of Ennahdha’s victory in the October 2011 parliamentary elections, the Islamist party was eager to market its moderation and its desire to form a coalition with moderate secular forces. To the dismay of these forces, however, as Ennahdha gained power, the party began to show a unilateral and hardliner face, leading to the loss of many of its friends and allies. Ennahdha forced those who were close to the party to doubt its true intentions, and to come to believe that its true goal is the establishment of an authoritarian regime that elevates Islamic religious slogans rather than one that contributes to the establishment of a civil democratic state.

For months, up until the assassination of Chokri Belaid, Tunisians have been living in the shadow of a government dominated by Islamists, as dangerous events, decisions, and policies are enacted. These acts have accumulated in such a way that the current public impression is that the Ennahdha party waited years for its opportunity to rise to power, and it will not surrender that role easily.

Over the past year, Tunisia has witnessed frequent visits by several extremist religious preachers from Egypt and eastern Arab countries, who have introduced notions of “female circumcision” and “enforcing the hijab among young girls” into the local media, concepts otherwise foreign to Tunisian society. This has caused panic among the liberal and progressive forces, who feel that this represents an acute threat to the modern achievements that Tunisia accumulated over the past fifty years.

The level of fear within Tunisian civil society has reached a climax with the killing of Belaid at the hands of those close to the Islamist government, and the establishment of the Leagues for the Protection of the Revolution. The leagues resemble the Iranian Revolutionary Guards in the way that they employ violence against the opposition, prohibit opposition parties from meeting and threaten many senior political leaders with assassination.

Tunisia today stands trembling at the brink of Lebanon’s difficult path. The future of its political life depends on whether or not the intellectual and political elite will succeed in addressing and ameliorating the fault lines that have emerged. In doing so, they must find a way to preserve Tunisia’s character that, in the past, has been able to encompass both Arab-Islamic identity and a modern progressive political program. If this fails, Tunisia will slip into a pattern of more violence, assassinations and further sectarian and ideological polarization.

Khaled Chouket is a Tunisian writer and journalist. (Fikra Forum 14.02)

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11.10 TUNISIA: Violence and the Salafi Challenge

The International Crisis Group observed on 13 February that the assassination of Chokri Belaïd, a prominent opposition politician, has thrown Tunisia into its worst crisis since the January 2011 ouster of President Ben Ali. Although culprits have yet to be identified, suspicions swiftly turned to individuals with ties to the Salafi movements. Founded or not, such beliefs once again have brought this issue to the fore. Many non-Islamists see ample evidence of the dangers Salafis embody; worse, they suspect that, behind their ostensible differences, Salafis and An-Nahda, the ruling Islamist party, share similar designs. At a time when the country increasingly is polarized and the situation in the Maghreb increasingly shaky, Tunisia must provide differentiated social, ideological and political answers to three distinct problems: the marginalization of young citizens for whom Salafism – and, occasionally, violence – is an easy way out; the haziness that surrounds both An-Nahda’s views and the country’s religious identity; and the jihadi threat that ought to be neither ignored, nor exaggerated.

As elsewhere throughout the region, the Salafi phenomenon has been steadily growing – both its so-called scientific component, a quietist type of Islamism that promotes immersion in sacred texts, and its jihadi component, which typically advocates armed resistance against impious forces. It made initial inroads under Ben Ali’s authoritarian regime, a response to the repression inflicted on Islamists in general and An-Nahda in particular. A new generation of young Islamists, relatively unfamiliar with An-Nahda, has become fascinated by stories of the Chechen, Iraqi and Afghan resistance.

All that was changed by the 2010-2011 uprising. Scientific Salafis, rather discreet and loyal under Ben Ali, began to both vigorously promote their more doctrinaire ideas and pressure An-Nahda, notably on the role of Sharia (or Islamic law) in the new constitution. For their part, jihadis back armed struggle outside of Tunisia, even recruiting fighters for the cause, notably in Syria. Yet they claim to have renounced violence in their own country. Tunisia, they assert, no longer is a land of jihad. It is a land of preaching in which jihadis should take root peacefully, taking advantage of general disorder and the emergence of lawless areas in order to advance Islamic law. As a result, non-Islamists have grown more and more anxious, with many among them accusing An-Nahda of conniving with the Salafis and of sharing their ultimate goals.

For now, despite the former regime’s ouster, the security vacuum, economic problems, strikes and various protest movements as well as the release and return from exile of numerous jihadis, Tunisia has experienced neither armed conflict, nor widespread violence nor major terrorist attack. Most instances of Salafi violence – the most striking of which was the 14 September 2012 assault on the U.S. embassy – have been more dramatic than deadly. An-Nahda played no small part, helping to avert the worst thanks to its prudent management of radical religious groups through a mix of dialogue, persuasion and co-optation.

Yet, such management has its limitations. An-Nahda finds itself in an increasingly uncomfortable position, caught between non-Islamists who accuse it of excessive leniency and laxity in dealing with the security threat and Salafis who denounce it whenever it takes a harder line. Based on circumstances – a flare-up in violence or a wave of arrests – the party is condemned by either the former or the latter. An-Nahda itself is divided: between religious preachers and pragmatic politicians as well as between its leadership’s more flexible positions and the core beliefs of its militant base. Politically, such tensions give rise to an acute dilemma: the more the party highlights its religious identity, the more it worries non-Islamists; the more it follows a pragmatic line, the more it alienates its constituency and creates an opening for the Salafis.

There is not much doubt that the non-Islamist opposition has displayed excessive and premature alarm and that it sometimes levels unsubstantiated accusations. Nor is there much question that it is finding it hard to accept the reality of Islamists governing their country. But the fact that they are exaggerated does not mean that these fears are baseless. Rather, it means that one must clearly define and distinguish them, and offer finely-tuned remedies. To arbitrarily lump together incidents linked to poverty and unemployment, attempts to impose a strict moral order, a political assassination and jihadi violence would only draw Salafis toward their more radical wings.

The first trend involves the growing presence of militant Salafis in poor neighborhoods. They have stepped in to fill the vacuum created by atrophying public services in marginalized areas; in some places, they have become key economic actors. They are known to help with schooling and serve as mediators in local conflicts, administrative issues and even marital problems. In many poor villages and urban centers, they are deeply engaged in the informal economy.

The second trend has to do with the spread of a more dogmatic form of religious expression, signaling a tug of war between two conceptions of Islam, one more and the other less tolerant. Initially relatively minor, vigilante-style violence has become increasingly commonplace; some citizens are reluctant to conduct their business publicly, fearful of provoking the Salafis’ ire. The Salafis’ influence also is manifested through their control over places of worship and of learning. An-Nahda wagers that this radicalization of religious discourse is a temporary phenomenon, the unavoidable letting-out of pent-up frustrations after years of repression. It is confident that, by integrating the Salafis into the political system, they will become more moderate. But many party critics view this as a risky gamble that will hasten society’s gradual Islamization from below.

The third trend concerns the existence of armed groups. They have yet to conduct large-scale operations. True, many Tunisian jihadis have been departing for Syria, Mali or Algeria, where they constituted a large portion of the hostage-takers at the In Amenas gas plant. But most jihadis seem willing to focus on proselytizing in Tunisia and, at least for now, are not prepared to engage in more serious violence on its soil.

Yet this could get worse. Instability in the Maghreb, porous borders with Libya and Algeria, as well as the eventual return of jihadis from abroad, could spell trouble. Already, the government has had to harden its stance given the rise in violent incidents; the jihadis’ tougher discourse vis-à-vis An-Nahda; and growing pressure from parts of public opinion, elements within the interior ministry and, in the wake of the attack on their ambassador, the U.S. As a result, relations between Salafis-jihadis and An-Nahda followers have deteriorated. This could lead to a vicious cycle between intensified repression and Salafi radicalization.

The government and An-Nahda face considerable challenges, made all the more urgent by Chokri Belaïd’s murder. The most immediate task is to resolve the current political crisis. Beyond that, it will be to devise responses calibrated to these distinct problems while avoiding a cookie-cutter approach that would stigmatize the most devout of their citizens; provide greater coherence to an increasingly cacophonous religious space while reassuring secularists; bolster law and order without embracing an exclusively security agenda and while reforming the police and judiciary; and, finally, strengthen cooperation with neighboring countries in a tense and chaotic context.

In the absence of an appropriate answer by the authorities and the dominant Islamist party, violence in all its shades – whether tied to social, demographic, urban, political or religious causes – could well cross a perilous threshold. (ICG 13.02)

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11.11 TURKEY: Understanding Turkey's Regional Health Markets

Straddling Europe and Asia, Turkey is a diverse health market ambitious to improve the lot of its 70 million inhabitants with rising health spend and health reforms. The country still has some way to go to equal its European neighbors and some of its health indicators are more akin to those in emerging economies in Africa and Asia.

Any assessment of Turkey must consider the recent health reforms, rising health spend and the economic and demographic dynamics that are influencing the development of the health market.

In 2012, GDP is estimated at $794.0 billion, equal to $10,629 per capita. Growth will initially be affected by the weaker economic conditions in the euro area, Turkey's main export market, but GDP is expected to grow by a CAGR of 12.0% in US dollar terms, between 2013 and 2017, reaching $1.397 trillion, or $17,928 per capita.

The population is estimated at 74.9 million in 2012, which represents an increase of 1.3% over 2011. Istanbul is by far the most populous province in the country; in 2011, it was home to 18.2% of the country’s population with 13,624,240 residents. The other larger provinces included Ankara and Izmir which accounted for 6.5% and 5.3% of the total population, respectively.

In 2010, there were 1,239,000 births in Turkey, equal to a rate of 16.9 per thousand population. The birth rate has slowed since a high point of 18.1 per thousand population in 2007. In contrast, there were 365,000 deaths in 2010, equal to a death rate of 5 per thousand population. This rate is considered low for a European country, although it is increasing.

Health Reforms are Driving Improvements

Recent reforms have reorganized and strengthened primary care services. Prior to the implementation of the Family Practitioner Scheme in late 2010, primary care services were provided by health centers, health posts and a number of dispensaries. Since 2011 the main providers of primary and ambulatory healthcare services in Turkey have been family physicians, family health centers and population health centers (in the public sector), doctors’ private offices and private clinics.

Under the new scheme, family practitioners (GPs and family physician specialists) are given incentives for providing preventive care. The main disadvantage of the scheme is the lack of a referral system, which enables patients to bypass the primary care level and enter the system at the secondary or tertiary level, if they wish; this means the primary care level is not working as effectively as it should be. However, a new system of co-payment exemptions for primary and higher level care has been implemented as an incentive for people to visit their GP first and to receive a referral to secondary or tertiary care.

Hospital Infrastructure

In 2010, there were 1,397 hospitals in Turkey, of which 65.4% were run by the public sector. The bulk of public sector hospitals were run by the MoH (843 facilities), followed by universities (62 facilities) and municipal (three facilities). The number of MoH hospitals grew strongly until 2007 but has fallen slightly since. A small increase has been noted in the number of university hospitals since 2007. The number of privately run hospitals has continued to expand with growth of 85.1% between 2000 and 2010 and the sector now runs 483 hospitals.

Continuing Shortages of Medical Personnel

Whilst the number of doctors practicing in Turkey has risen steadily since 1990, a shortage remains in the country, reflected by the low rate of 1.7 per thousand population. The rate has risen slowly over the years, from 1.6 per thousand population in 2000. Turkey has a very low nurse rate; this stood at 1.3 per thousand population in 2010. This is lower than the physician rate, due to a lack of effective human resources planning and management, which has tended to prioritize physicians and neglect the gaps in nursing care. The uneven geographical distribution of doctors, particularly general practitioners, has been addressed over the last decade. Compulsory service and strict healthcare personnel transfer rules have helped to balance inequalities in deprived areas. (Espicom 2012)

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11.12 TURKEY: Power Sector Analysis

The power sector in Turkey is a highly evolved and efficient sector, being supported by an extremely favorable and facilitative government policy and regulatory regime. The power sector is divided into three sub-sectors in Turkey, namely the generation, transmission and distribution sectors.

The power generation sector in Turkey is fully competent to meet the domestic demand. Furthermore, the country is also capable of supplying electricity to neighboring nations in Europe and Asia, as triggered by its strategic location as a Euro-Asia power hub. The total installed capacity in Turkey surpassed was around 57 GW in 2012 and future plans for further rise in this capacity, aided by rising investments from domestic and foreign companies.

Turkey is a very promising destination for long-term power sector investments for domestic and foreign companies. The Turkish Power sector today boasts of extremely market friendly regulations, speeded up as a part of the ongoing liberalization process, which has resulted in huge capacity additions by big players in order to meet the growing present and future demand for power. The rising investment from public and private sector entities along with government focus on market liberalization will result in positive outlook for power sector in coming years.

The primary fuels currently being used for production of power in Turkey are coal and water. Other fuels that are gaining importance with time are oil, natural gas and geothermal resources. The sector is growing rapidly with Government facilitating the flow of private sector investment into the sector. The sector also has a great future owing to the rising demand for power in Turkey and nearby regions of Europe and Middle East. (Kuick Research, February 2013)

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11.13 CYPRUS: Fitch Says President's Bailout Mandate May Ease Negotiations

Fitch Ratings (http://www.fitchratings.com) said on 25 February that the stance of the new Cypriot president-elect and his government could make the country's negotiations with the Troika for a rescue package less challenging than under the outgoing president. Nicos Anastasiades has stated his intention to secure "timely financial support," and now arguably has a mandate to conclude negotiations. He has already been building relations with leaders of key European partners, including Germany.

However, despite his overwhelming victory in the weekend's elections he will face the same policy challenges as his predecessor, and there is still lingering uncertainty about the timing and details of an EU rescue program.

We downgraded Cyprus to 'B'/Negative in January, mainly because we consider that bank recapitalization costs are likely to be higher than previously thought. But the rating is supported by our expectation that the authorities will reach agreement with the Troika on an official financing program in time to pay a €1.4b bond redemption on 3 June. The final details will depend on the Troika and the government's assessment of debt sustainability, which has not yet been finalized.

A bailout program is unlikely to include restructuring of Cypriot sovereign debt, because it would not provide significant debt relief. It would also weaken the credibility of eurozone policy makers, who have said that Greece's private sector involvement (PSI) was an exception, and could create contagion risks for other eurozone countries. That some of the debt held by foreign investors is covered by international law could also add to the costs and uncertainty of PSI.

We expect the Cypriot government to privatize some state-owned enterprises as part of a final agreement with the Troika, but there is uncertainty about how much debt relief this would achieve. We would expect any restructuring of bank debt to be restricted to junior debt holders, though banks are mostly deposit financed, which limits the potential impact. We also think there is a possibility of mutualization of bank recapitalization costs with eurozone partners, for example through the European Stability Mechanism, although this is not our base case.

The previous government had requested official help from their European partners and the IMF in June 2012, although a Memorandum of Understanding has yet to be signed. The government has been shut out from debt markets for almost two years.

A bilateral €2.5b loan from Russia at the end of 2011 helped with most of the public financing requirements last year. The Russian government has signaled that it will extend the maturity of the loan which was due in 2016. According to reports Anastasiades has stated that reaching agreement with Russia on contributing to a rescue will be an "immediate priority", though it is unclear whether any such deal can be struck.

More recently the authorities have become dependent on issues of Treasury bills to SOEs and banks and available cash reserves. We believe a disorderly default stemming from the government running out of cash before the June bond payment is highly unlikely. (Fitch 25.02)

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