The Weekly Circuit
👋 Good Monday morning in the Middle East!
Leaders in the U.S. and around the world are reckoning with the potential economic and political impact from the BRICS group’s decision to expand and offer invitations to the United Arab Emirates, Saudi Arabia, Iran, Egypt, Ethiopia and Argentina.
The UAE quickly accepted last week’s offer from BRICS, which is comprised of Brazil, Russia, India, China and South Africa. The bloc seeks to position itself as a counterweight to the G7 and other international groups led by the U.S. and Europe. “We look forward to a continued commitment of cooperation for the prosperity, dignity and benefit of all nations and people around the world,” UAE President Sheikh Mohamed Bin Zayed tweeted.
Saudi Arabia has yet to accept the invitation. Although the world’s biggest oil producer is expected to get on board, it must balance its relationship with the United States alongside China, the leading economic power in the group and Saudi Arabia’s biggest trade partner and petro-customer.
Iranian President Ebrahim Raisi hailed the invitation with a slap at the U.S., saying the expansion of BRICS to include his country – which has been weakened by international sanctions – “shows that the unilateral approach is on the way to decay.”
The move to expand the bloc and include Iran should be seen as a warning that the U.S. must pay closer attention to the needs of its allies and leverage over its foes, according to Jonathan Panikoff, director of the Atlantic Council’s Scowcroft Middle East Security Initiative. “Over time, groupings such as the BRICS have the potential to undermine Washington’s power when it comes to punishing or isolating countries pursuing policies that contradict U.S. interests,” Panikoff wrote on the think tank’s website.
China’s offer to build a nuclear power plant for Saudi Arabia is getting serious consideration in Riyadh, The Wall Street Journal reported. The state-owned China National Nuclear Corp. has bid to build a nuclear plant in Saudi Arabia’s Eastern Province, near the border with Qatar and the UAE. Such a move applies pressure to the Biden administration, which has so far maintained nonproliferation requirements amid negotiations to normalize relations between Riyadh and Israel.
Israel ranked first in the annual list of developed countries with the highest cost of living compiled by the Organization for Economic Cooperation and Development. Prices in Israel were 38% higher than the average among the OECD’s 38 member-countries in 2022. Switzerland came second, followed by Iceland and the U.S.
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DEEP TECH
Saudi Arabia aims to address gap between ivory tower, economy
Saudi Arabia is getting more nimble as it tweaks the direction of its biggest research university to provide economic opportunities for the country. Crown Prince Mohammed bin Salman announced an ambitious strategic overhaul at King Abdullah University of Science and Technology, known as KAUST, The Circuit’s Kelsey Warner reports.
Fresh fund: The plan includes a new institute to accelerate the commercialization of the university’s research and a new $200 million deep-tech fund to invest in early stage companies. The prince dubbed it “a new era for the university” that seeks to more tightly connect the school’s research priorities with the kingdom’s Vision 2030 plan to diversify the kingdom’s economy away from oil revenues.
Sector-specific: The university, which is located in Thuwal, a coastal village north of Jeddah, will focus its research efforts on economically productive sectors like health, sustainability and the environment, energy and industry, according to a statement. The new investment fund also bridges a gap: deep tech, which often addresses complex engineering or scientific problems, is underinvested in the region, with Middle East venture capital investors often looking to pour money into already-proven technologies or business models that have been successful elsewhere.
Unique campus: KAUST itself is a unique institution in Saudi Arabia. Unlike other universities in the kingdom, it is one of only a few that are coed, and where classes in Islam are not required. KAUST also has internet access that falls outside the Ministry of Education’s jurisdiction and censors, according to a paper in the Journal of Education and Practice, a peer-reviewed U.S. publication.
Aligned to economy: In the 14 years since it was established with a $10 billion endowment (now estimated at $20 billion), the school has regularly ranked highly among global universities for citations-per-faculty, a measure of research output, while at the same time becoming more tightly aligned to Saudi Arabia’s economy.
Gathering pace: “One thing they’re emphasizing more now than before is that the research outputs of the university be tailored to the needs of the local economy,” Omar Al-Ubaydli, the director of research at the Bahrain Center for Strategic, International and Energy Studies, told The Circuit. “That’s not something that was emphasized before.”
POLITICALLY CORRECT
NY mayor admires drones, slurps vegan honey in Israel tech tour
New York City Mayor Eric Adams got a crash course in Israel’s startup scene during his three-day tour last week, which was tailored to the former police captain’s interests in surveillance drones, crowd control and vegan cuisine, Linda Gradstein writes for The Circuit.
Surveillance drones: During a demonstration at Israel’s National Police Academy, Adams showed particular interest in the symbiosis between leather-jacketed motorcycle cops and the crowd-surveillance drones flying above them. He challenged the New York police brass with whom he traveled to figure out how such methods could be adopted back home. The mayor was less enthusiastic about face-recognition technology, which has been criticized by some over privacy concerns.
Treading carefully: The mayor came to Israel at an especially fraught time over anti-government protests and met with Israeli Prime Minister Benjamin Netanyahu as well as several activists in the opposition movement. Adams stressed that he met people with differing viewpoints and did not take a side on the government’s efforts to reform the judicial system. “I listened. I didn’t weigh in,” he said.
Vegan feast: Adams was more outspoken when it came to Israeli foodtech. The mayor is almost completely vegan for health reasons and he spoke from personal interest with executives of the Israeli companies that came to Netanyahu’s office in Jerusalem to display their wares. Adams tasted vegan honey made by Bee-IO Ltd., lab-grown cultured steak made by Aleph Farms Ltd. and an assortment of other vegetarian meat substitutes. “We were able to see a production of honey that does not need bees at all,” Adams said after he and Netanyahu slurped samples with wooden dippers. “It was good-tasting honey.”
Cocktail party: Hundreds of Israeli startups have offices in New York City and the country ranks second to China in the number of its companies that trade on the Nasdaq. More than 200 founders and executives from Israeli firms met the mayor at a rooftop cocktail party in Tel Aviv. “I was impressed with his understanding of how much interaction there is between the tech communities in Israel and New York and how much potential there is for more,” Michael Granoff, managing partner of venture capital firm Maniv Mobility, told The Circuit.
Circuit Chatter
About Face: Chinese buyers are returning to Dubai’s booming real estate market, according to the emirate’s biggest property developer, Emaar.
Investment Targets: A two-year surge in foreign investment to MENA brought the most cash to Saudi Arabia, the UAE, Qatar, Egypt and Morocco, according to a new Fanack study.
Energy Diplomacy: Israel’s energy minister approved exporting more gas to Egypt from an offshore well, saying it would boost revenue and bring diplomatic dividends.
Gas Cash: Energy analysts say Lebanon is years away from being able to gain substantial economic benefit from a natural gas field off its western coast.
Ratings Dissenter: Fitch analyst Cedric Berry told Bloomberg he didn’t downgrade Israel as other ratings firms did because he believes the government’s judicial reform won’t substantially harm the economy and its technology companies remain strong.
Shopping Spree: Majid Al Futtaim, the Middle East’s biggest mall operator, attributed a sharp rise in profit and revenue in the first half of the year to a “buoyant economy” in its home market, the UAE.
Flight to Justice: Fugitive businessman Vasil Bozhkov, aka “The Skull,” surrendered to authorities in his home country Bulgaria after three years of self-imposed exile in the UAE.
Closing Circuit
On the Move: DP World will invest $510 million to build a new container terminal at the Kandla port in India. Last week the UAE logistics giant reported a nearly 10% drop in first-half profit.
Drive my Car: Saudi Arabia’s Lumi auto rental company said it will move ahead with plans to sell a 30% stake on the Tadawul stock exchange.
Space to Grow: Texas space company Axiom, which is building a commercial space station, raised $350 million in a Series C round led by Saudi-owned Aljazira Capital.
Drug Settlement: Israel’s Teva Pharmaceutical settled price-fixing charges by agreeing to pay $225 million and stop producing the generic cholesterol drug pravastatin.
Egyptian Energy: Apache Corp., a U.S. energy exploration company, plans to spend as much as $1.4 billion in Egypt next year, CEO John Christmann said.
Selina’s Slide: Selina Hospitality’s Nasdaq shares have sunk 99% since the Israeli hub for digital nomads went public last October and briefly reached a $4 billion market cap.
Drone Killer: The Dutch Defense Ministry signed a $55 million contract to buy an anti-drone system from Israel’s Elbit Systems.
New Money: Dubai-based crypto exchange BitOasis raised a round of funding, the size of which was undisclosed, led by the Indian digital-asset platform CoinDCX.
Tech Fund: Qumra Capital, whose partners are active in Israeli protests against judicial changes, raised $275 million for a new tech fund, the most by a VC firm this year.
Plug and Pay: e& Capital, the venture arm of one of the Middle East’s biggest telecommunications companies, led a $5 million Series A fundraising round in Maxbyte, an industrial robotics company.
On the Circuit
Sheikh Hamad bin Jassim bin Jaber Al-Thani, the former prime minister of Qatar and head of the Qatar Investment Authority, is reportedly mulling the sale of two luxury properties in London for a combined asking price of $470 million.
Michael Bloomberg overhauled the management of his financial information company, Bloomberg LP, naming Mark Carney, former governor of both the Bank of England and Bank of Canada, as chairman, and longtime executive Vlad Kliatchko as CEO.
Salwa Akhannouch, founder of Morocco’s Aksal Group and wife of the prime minister, was featured in Billionaires Africa as one of the continent’s seven wealthiest retailers.
Sheikh Khaled bin Mohamed, crown prince of Abu Dhabi, launched a new talent center that focuses on training Emirati job seekers as the UAE seeks to increase local participation in the workforce.
Khalaf Al Habtoor, Dubai businessman and philanthropist, said he was “crushed” after 63 Afghan women to whom he extended university scholarships were barred from departing the airport in Kabul by the Taliban government.
Cristiano Ronaldo, forward for Al Nassr in the Saudi Pro League, is making it look easy, scoring a hat-trick and providing an assist in a decisive 5-0 win over Al Fateh on Friday.
Ahead on the Circuit
Sept. 5-6, Tel Aviv, Israel: Agro-Mashov Conference 2023. Growers, buyers, retailers, wholesalers, importers gather for annual Israeli agricultural conference. Expo Tel Aviv.
Sept. 11-13, Riyadh, Saudi Arabia: Saudi Water Expo. Investors and leaders from industry and government discuss prudent use of the region’s water resources. Riyadh International Convention and Exhibition Centre.
Sept. 12-13, Abu Dhabi, UAE: Additive Manufacturing Conclave. A gathering of those advancing the 3D printing ecosystem in MENA including government, researchers and developers. Abu Dhabi National Exhibition Centre.
Sept. 13-14, Dubai, UAE: Global Vertical Farming Show. Vertical farming companies from around the world meet with technology firms, policymakers and investors. Movenpick Grand Al Bustan Hotel.
Sept. 13-14, Riyadh, Saudi Arabia: IDC Saudi Arabia CIO Summit. Chief information officers explore new digital trends in business. Fairmont Riyadh Hotel.
Sept. 13-15, Singapore: Milken Institute Asia Summit. Industry leaders, policymakers and experts network and discuss trends and challenges facing Asia. Four Seasons Hotel.
Sept. 14-15, Abu Dhabi, UAE: Super Angels Summit 2023. Angel investors meet with startup founders at annual conference. Abu Dhabi National Exhibition Centre.
Sept. 19, Dubai, UAE: Middle East Investment Conference. Asset owners, managers, investors discuss latest trends in regional market. Ritz Carlton, DIFC.
Sept. 20-24, Dubai, UAE: Gitex Shopper. Electronics fair with product launches, presentations by major world brands. Dubai World Trade Centre.
Culture Circuit
Assyrian Stand-Up: Jenan Younis is developing a one-womancomedy show for the London stage titled “Iraqnophobia,” which explores her Assyrian heritage through the lens of the Iraq War 20 years ago that she witnessed as a child, according to a profile in the Financial Times. Younis, a professional stand-up comic whose father is Palestinian and mother is Iraqi, also works part-time as a surgeon.
Razzle-Dazzle ‘Em: An Arabic adaptation of the Broadway musical “Chicago” played to sold-out audiences at the Casino du Liban outside Beirut and a summer arts festival south of the Lebanese capital. The show applies the basic themes of municipal corruption and moral licentiousness to present-day Beirut, adhering closely to the original script while substituting Arab names and peppering the songs with Lebanese references. The producers hope to take the show elsewhere in the Middle East and beyond the region.
Black Gold for the Silver Screen: The discovery of oil in Saudi Arabia and the early days of Aramco will get the Hollywood treatment. Passage Pictures announced “Sands of Fortune,” a film that will tell the story of American geologist Max Steineke and his Bedouin guide Khamis bin Rimthan, who are credited with the construction of Saudi Arabia’s first oil well in 1938. The filmmakers plan to feature a mix of Saudi and American talent onscreen, and Passage Pictures is in talks to partner with several local production companies on the project.
