The Weekly Circuit
👋 Good Monday morning in the Middle East!
Amid the business lull this week with the intersection of Ramadan, Passover and Easter, the Middle East has been rattled by developments in the region. Three weeks after Iran and Saudi Arabia said they would renew diplomatic relations in an agreement brokered by China, the U.S. Navy announced it was sending a nuclear-powered submarine equipped with guided missiles to its base in Bahrain, passing through Egypt’s Suez Canal and the Persian Gulf. In turn, Iran said it will conduct a maritime exercise that will send its ships into both the Gulf and the Red Sea.
Israel is on alert in the wake of missile attacks from Lebanon and Gaza, while Palestinian gunmen killed two Israeli-British sisters in the West Bank and an Arab attacker in Tel Aviv rammed his car into a crowd and killed an Italian tourist.
Economic growth will slow across the Middle East and North Africa this year as inflation heightens food insecurity, according to the World Bank. Gross domestic product in the region is expected to drop to 3% in 2023 from 5.8% last year, the World Bank said in a March 30 report. Almost one in five people living in MENA’s 16 poorest countries will face food insecurity, of which 8 million children under the age of 5 will regularly suffer from hunger, according to the report.
Two Saudi astronauts, including the first Arab woman in space, will blast off next month on a NASA mission to the International Space Station. Rayyanah Barnawi, a breast cancer researcher, and her crewmate Ali Al Qarni, a fighter pilot in the Saudi Air Force, will join American and Canadian astronauts when the SpaceX rocket launches from the Kennedy Space Center in Florida on May 9. Waiting for them in the orbiting space lab will be Emirati astronaut Sultan Al Neyadi.
Welcome to The Weekly Circuit, where we cover the Middle East through a business and cultural lens. Read on for the stories, deals and players at the top of the news. Please send comments and story tips to [email protected].
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Gulf ties with Indian health care industry draw investors to Mideast alliance
When Hong Kong-based fund manager Sean Debow went hunting in India for promising health care investments in 2009, he became intrigued by the growing demand for knee and hip replacement surgery, The Circuit’s Jonathan Ferziger reports. Many private hospitals in New Delhi and Mumbai were filling beds for such elective operations with patients from the nearby Arab Gulf states who were struggling with obesity. The trend in medical tourism that Debow discovered 14 years ago when he ran a small regional investment firm has fueled a significant part of his India strategy as CEO for Asia of Eurizon Asset Management, the Milan-based unit of Italy’s biggest banking group, Intesa Sanpaolo. With $416 billion under management, Eurizon invests in some of India’s biggest hospitals and pharmaceutical companies.
Trade quartet: “I’ve been watching the sector grow,” Debow told The Circuit during an interview in Tel Aviv. “The accelerant has absolutely been the growth from the Gulf, whereby there’s this mutual trust between Indian health care companies, health professionals and people in the Gulf,.” The close ties between India and the Gulf states has in turn become a pillar of the regional trade alliance known as “I2U2” that was designed to promote cooperation among India, Israel, the United Arab Emirates and the U.S., following up on the 2020 Abraham Accords. Creating the quartet was among the foreign policy objectives that U.S. President Joseph Biden sought to reinforce during his visit to Israel and Saudi Arabia last July. Health care is among the central components of the initiative, which also aims to promote investment in water, energy, transportation, space and food security.
Partner’s synergy: Debow, a 56-year-old Canadian who is also chief investment officer for Eurizon Asia and has spent three decades managing money in the region, describes a level of synergy among the group’s four members in the health care market. It’s based on the wide-ranging U.S. leadership in the field, the UAE’s willingness to invest large sums of money, Israel’s innovative medical startups and India’s position as the world’s fifth-biggest economy with a population that is projected to surpass China’s this year, he said. Israel’s Teva Pharmaceutical Industries is the largest maker of generic drugs while India’s Sun Pharma is ranked No. 4. Betting on India’s health care industry, where he says “it would not be unusual to see 30% compounded growth for the next five years,” Debow said cooperation with the UAE, Israel and the U.S. is good for everyone.
Water from air: Formally established in October 2021 by U.S. Secretary of State Tony Blinken and the foreign ministers of the UAE, India and Israel, I2U2 got a top-level launch last year. Biden held a video conference from Jerusalem to discuss the initiative with Sheikh Mohammed bin Zayed, now president of the UAE; Indian Prime Minister Narendra Modi; and the Israeli prime minister at the time, Yair Lapid. Besides health care, other areas where the commercial paths of the three countries intersect is in water conservation and the diamond trade. Watergen, an Israeli company that can extract large quantities of drinking water from the air, opened a branch in India after a visit in 2018 by Prime Minister Benjamin Netanyahu. Watergen also started operating in the UAE after the Abraham Accords normalized ties between the two countries that had no diplomatic relations before 2020.
Opening corridors: The transition of the landmark Arab-Israeli agreements into a multilateral network will have further benefits down the line in developing the alliance as a regional hub for international trade, Sanjeev Dutta, executive director of commodities and financial services at the Dubai Multi Commodities Centre, told The Circuit. “You’re opening up corridors, you’re opening up efficiencies, you’re removing a protectionist mentality,” Dutta said.
Venture Partners: The venture arm of Saudi Arabia’s Public Investment Fund has begun disclosing its partnerships with nearly 40 U.S. VC firms and several international funds.
Changing Places: Fairmont Hotels & Resorts has moved its headquarters from Paris to Dubai as part of an effort to focus on the Gulf’s growing hospitality industry.
Royal Treatment: Cruise Saudi, a kingdom-owned business, will launch a luxury yacht with 47 suites, Japanese gardens and high-end restaurants.
Missed Target: An Israeli sovereign wealth fund that was set up with profits from offshore gas finds holds $617 million, one-sixth of government predictions.
Sleep Safely: Red Sea Global, which will open 13 hotels on Saudi Arabia’s western coast, is sending security staff for anti-terrorism training with Saudi Special Forces.
Russia Crackdown: The UAE Central Bank revoked the license of Moscow-based MTS Bank in compliance with international sanctions.
Off the Road: Kuwait may withdraw driver’s licenses from expatriate residents whose salaries are below $1,950 a month and individuals without university degrees.
Charity Click: Amazon will use its technology and logistics expertise to help the UAE Food Bank distribute meals as part of its “Iftar on Wheels” program.
Sports Wager: Entertain, one of the world’s biggest sports betting companies, bought Israel’s 365Scores for $160 million.
No Thanks: Tunisia turned down a $1.9 billion International Monetary Fund bailout, rejecting demands to reduce food subsidies and other economic reforms.
Digital Access: The World Bank approved a $450 million loan to help Morocco expand access to financial and digital services.
Setting Fares: Israel’s Fetcherr, which created an AI-based pricing system used by airlines, secured a $12.5 million investment from investors led by M-Fund.
Space Bill: The UAE is issuing a new AED 1,000 bill that depicts its late founding leader, Sheikh Zayed bin Sultan, sitting next to a model of a space shuttle.
Drink Up: Anheuser-Busch InBev, the world’s largest brewery, will select as many as six Israeli startups for joint R&D projects or new pilot business ventures.
On the Circuit
Reza Ameri was appointed Iranian ambassador to the UAE, a post that has been vacant for eight years. Ameri was previously ambassador to Algeria, Sudan and Eritrea.
Eric Gan was named CEO of Israel’s Cybereason as the company raised $100 million in a financing round led by SoftBank, where Gan was a senior executive.
Isaac “Yitz” Applbaum, co-founder of Mizmaa Ventures, appears on Joe Lonsdale’s “American Optimist” podcast to talk about the wide-ranging investment opportunities he’s found in the Gulf and Israel. “I’m the first Orthodox Jewish boy from Brooklyn who’s chairman of a genome sequencing company in Saudi Arabia,” he says. “Think about that.”
Kevin Mayer, co-founder of Smash Capital, is trying to raise $500 million and double the size of his VC fund, which invests in consumer internet and technology startups, according to The Information.
Ahead on the Circuit
April 26-27, Dubai, UAE: FiNEXT Awards and Conference 2023. A platform for global investors, financial institutions and fintech companies to interact. Le Meridien Dubai Hotel and Conference Centre.
May 2-3, Tel Aviv, Israel: Agritech Israel. Introducing innovative farming technologies for growing food and meeting the challenges of climate change, water shortages and desertification. Expo TLV.
May 3, Tel Aviv, Israel: GoForIsrael Investment Conference. Connecting global investors and technology companies. Co-hosted by Cukierman & Co and Catalyst Investment. Tel Aviv Hilton.
May 11, Dubai, UAE: Annual Private Wealth Middle East Forum. Conference connecting family offices, high-net-worth wealth managers and investors. Shangri-La Hotel.
May 15-16, Abu Dhabi, UAE: Mobility Live Middle East 2023. Conference brings together investors, corporate executives, policymakers to discuss the future of transportation. Abu Dhabi National Exhibition Center.
May 23-25, Doha, Qatar: Qatar Economic Forum. Qatari financial leaders, international investors and corporate executives meet to discuss global financial challenges.
May 29-31, Tokyo: Israel-Japan Innovation and Technology Conference. Calcalist and Israel Discount Bank hold three-day conference pairing Israeli and Japanese investors and business executives. Toranomon Hills Forum.
Afghan Stand-in: Saudi Arabia’s AlUla region will substitute for Afghanistan’s barren desert terrain when the action thriller movie “Kandahar,” which stars Gerald Butler as an undercover CIA operative trapped in hostile territory in Afghanistan, is released on May 26. The film, directed by Ric Roman Waugh, is the first made in AlUla, which Saudi Arabia is promoting as a prime location for movie-making and a cultural oasis in the Arabian desert. The AlUla Cultural Center, whose mirrored facade reflects the rocky cliffs that surround it, was home last month to a retrospective of ‘60s artist Andy Warhol. Produced by the G-BASE, Thunder Road, Capstone Studios and MBC Studios ,
Masters Runners-Up: When Spaniard Jon Rahm came from four shots behind to win the Masters on Sunday at the Augusta National Golf Club in Augusta, Ga., he was trailed by two stars of the upstart LIV Golf league who have fought all year to challenge the predominance of the PGA Tour. Phil Mickelson and Brooks Koepka, leaders in the LIV league, which is backed by Saudi Arabia’s Public Investment Fund, tied for second place in professional golf’s most prestigious competition. The PGA Tour is suing LIV for poaching some of its top players, including Mickelson and Koepka.
Pharaoh in Paris: The sarcophagus of Ramses II, the ancient Egyptian pharaoh, is on display in Paris for a rare exhibition recognizing French assistance in protecting the mummy found inside from decay. While the coffin is part of a traveling museum show of Egyptian treasures found in the tomb of Ramses II, only visitors to the French exhibition will be able to view the sarcophagus. The mummy itself, which was included in an international tour in 1976, remains in Cairo because of an Egyptian law that forbids transporting royal mummies to other countries. The Paris show at the La Villette exhibition grounds runs through Sept. 6.