NO MARMITE IN TUNISIA

Man In The Hat Business Archives : February 2008

Housing Rights For Mothers Who Have Custody Of Their Children Remain Sacred

20th February 2008

Due to the importance of the subject and as a one off, the man in the hat’s column which is usually consecrated to business and investment news, has decided to break up with tradition and report on a much enquired about subject.

The Chamber Of Deputies

A bill on the housing rights of the mother who has custody of her children in the periods before and after divorce, has been reviewed by the Chamber of Deputies during a plenary meeting held yesterday morning, chaired by Mr Fouad Mebazaa, President of the Chamber of Deputies and in presence of several members of the government.

The provision reflects primarily the importance of the role of the mother and the best interests of the child. The Article 56 of the Personal Status Code (PSC) indicates that, ‘all necessary maintenance costs of the child are borne by the child’s estate ( including money, property, etc…) or those of the father if the child does not possess estate of his own. Fathers must provide housing for the child and the bearer who cares for the child if the latter does not possess a home.’ However, the right of housing as determined by the Article has caused the bearing mother caring for her child numerous difficulties at the application level, notably the father’s resorting to sell the house and delays in the housing allowance payments.

The review of the bill guarantees civil protection of the housing rights of the caring mother, moreover, it guarantees a penal protection for the incumbent caring mother, by criminalising the sale or the mortgaging of the property if the housing rights of the mother with custody of her child is not mentioned on the mortgage or sale document. Thus, on the basis of treating each case on its own merits, there is an obligation on the father to house the mother with custody of her children in the family home or continuing to pay the rent if the property is rented. Alternatively, fathers will be forced to pay housing allowance, which allows the mother to rent a house that fits her needs and that of the children in her care. According to Mr Bachir Tekkari, Minister of Justice and Human Rights, all the necessary arrangements have been agreed to allow the mother to keep the house. He also said that in the event of separation, the court may rule for the establishment of a rent allowance or for the sharing of the premises and it is in the light of the ruling that cases should be examined. The bill therefore ensures the mother’s right to continue to occupy the home in the event of selling or mortgaging, while allowing for the possibility of revising the law.

An Energy Balance Trade Surplus In 2007

20th February 2008

Tunisian exports of energy products and lubricants in 2007 have increased by 1120.9 million dinars compared with 2006 when they have also experienced a sharp rise. Last year, Tunisia’s exports of energy products and lubricants, were valued at 3138.5 million dinars including 2631.8 million dinars of crude oil, while imports were estimated to be 3001.6 million dinars. The result, an energy balance of trade surplus of 136.9 million dinars for 2007. This energy trade surplus, is the first since 2004.

Energy exports grew by more than 50% thanks to the surge in oil prices and its positive impact on the local oil production, temporarily reversing the deficit in the energy balance, as was rightly noted in the IMF’s latest report on the Tunisian economy. It must be said, that Tunisia’s production of this product in the last five years was characterised by its decline and its inconstancy, given the drop in production of some traditional sites such as that of El Bourma (South East Tunisia).

In order to rectify the situation, the Tunisian authorities have adopted an amendment to the finance bill in December 2007, which provides for an increase in subsidies to the General Compensation Fund (GCF) of 0.6% of GDP bringing the total of its intervention to 1.3%. The authorities than, raised prices. The price increases at the pumps were made in May and October 2007 and allowed to maintain oil subsidies to 1% of GDP. According to the IMF’s report, ’the increase in revenue from oil companies, non-taxable revenues customs duties (due to the strong growth of imports) is expected to more than offset the additional expenditure.’ The authorities then, revised their previsions of the Finance Act of 2008, built on a price based on $75 and $80 per barrel, according to the latest intervention by the finance minister at a seminar on taxation, with the employers’ representatives. Despite this, the IMF representatives who have visited Tunisia in January 2008, found that ’if international oil and commodity prices remain high and in the absence of a significant increase in administered prices, the subsidies risk of being higher than the budget.’ The International Monetary Fund, thus, advises further increases.

In the first month of 2008, Tunisian exports of energy products and lubricants, have increased by 43.2%. However, the energy trade balance in the same month commenced with a deficit of 70.5 million dinars. If the new, albeit smaller discoveries are confirmed, this should change. According to sources from the energy, industry and small to medium enterprises ministry, the domestic production of hydrocarbons will, in effect, take a rising pace in the course of the next three years. Also, according to the same sources, the entry into the production phase of the new sites such as ’Hasdrubal’, ’Maamoura’, ’Barka’, etc, will contribute to the production increase of hydrocarbons. By the end of 2007, the total number of licences awarded for research and exploration has reached 50, of which 37 were for research and 13 for exploration compared to 10 permissions during the 10^th plan. These licences, on shore and off shore, spread, roughly, over an area of 189,000 square km and are located across the country and not just concentrated in the south as previously. 16 licences are indeed in the south, 12 in the centre, 11 in the Gabes Gulf, 4 in the Hammamet Gulf and a further 7 licences in the northern region, a novelty in the area of exploration. It is worth noting, that 8 licences were granted during 2007, including 3 in the south and 4 others, respectively, 2 in the centre and 2 in the north of the country.

A further two licences were issued today, Wednesday February 20^th, when Mr Afif Chelbi, Minister of Industry, Energy and Small to Medium Size Enterprises, signed the Memorandum of Agreement with two Vietnamese companies, ‘Petrovietnam Exploration and Production Cooperation LTD‘ and ‘Vistsovpetro Joint Venture‘ in collaboration with ‘The Tunisian Enterprise for Petrolium Activities‘ (TEPA). The convention is related to two permits of hydrocarbon research and exploration ’Tanit’ and ’Guellala’ in the golf of Gabes and cover an area of, respectively, 2436 square km and 1540 square km. The minimum works commitment, corresponds to a total investment in the order of 16 million dinars. Petrovietnam, who just made its entry to Tunisia, is already present in several oil and gas sites in Algeria, Venezuela, Malaysia and Peru.

According to the US Geological Survey, the remaining reserves yet to be discovered in Tunisia are estimated to be 600 million tonnes of energy product, of which 350 million tonnes of oil and 250 million TOE gas. According to other sources, Tunisia possess 57 million tonnes of oil reserves. Natural gas is a source which remains largely untapped. Only 0.33 billion cubic metres were extracted while the available reserves are in the order of 74 billion cubic metres.

The Tunisian Economy Gets The IMF's Nod Of Approval

17th February 2008

Tunis : The Capital Of Tunisia

Introduction.

The delegation from the International Monetary Fund (IMF), has just come to publish its report on the state of the Tunisian economy following its visit to Tunisia in January this year. A report that came to maintain the positive results that the Tunisian economy has achieved during 2007.

Despite the difficult and unfavourable external economic environment, the report concluded that the Tunisian economy continues to show resilience, with an appreciable growth rate for the year 2007. The economic growth having taken an accelerated pace, finds its strength in the good performances in the agricultural, energy, manufacturing and service sectors, stresses the report, which allowed for the growth rate to rise from 5.5% in 2005 to 6.3% in 2007, the highest growth level in the past 10 years. The report has also highlighted the strong growth of the Electro-Mechanical industry which increased its share in the total exports of goods to 27% in 2007, allowing for a better diversification of the Tunisian manufacturing industry. This economic performance has led to a decrease in unemployment from 14.3% in 2006 to 14.1% in 2007. Nevertheless, the challenges to maintain this growth rate and further reduce unemployment whilst controlling macroeconomics balances remain high. The interim mission focused on macroeconomic issues in the short term in a context marked by the sharp rise in world oil and commodity prices and a likely slowdown in the growth of the global economy, particularly in the wake of the fallout from the sub-prime mortgages in the United States and the credit crunch that followed.

Monetary Policy.

In terms of monetary policy which the report qualifies as ‘effective,’ the benefits are notably characterised by the balance of inflation, being reduced from 4.5% in 2006 to 3.1% in 2007. The report emphasises, however, that inflationary pressures have reappeared, yo-yoing, from 5.3% in May 2006 after the soaring of oil prices and certain commodities, to 2% in April 2007. More recently, in the wake of another surge in oil and raw materials prices, the annual inflation again climbed to 5.3% in early December 2007. To this end, an evaluation study of their impacts would be of obvious interest to better understand the issue. The Tunisian Central Bank (TCB) has responded by raising its minimum reserve ratio from 3.5% to 5% at the end of November 2007. The expansion in the economy has allowed for the consolidation of its external position and despite the slight increase in the current account deficit, the latter remains sustainable. The IMF delegation stressed that exports and imports have also taken their share of growth in 2007. Imports are almost predominantly intermediate goods and equipment, thereby accelerating growth. However, this did not preserve the current account deficit from widening, from 2% of GDP in 2006 to 2.5% in 2007, following the deterioration in the terms of trade, caused by higher commodity prices. This balance has been compensated by a strong inflow of Direct Foreign Investment (DFI).

In 2007, the Tunisian Dinar has experienced an average depreciation vis-à-vis the Euro of 4.5% and an average appreciation vis-à-vis the Dollar of 4%, reflecting the rise of the Euro on the international foreign exchange market. In real effective terms, the Dinar has registered a slight depreciation in the order of 3% on the basis of the index calculated by the IMF. The sustained value of the Dinar, reflects principally a deterioration in the terms of trade, the persistent but sustainable deficit of the current account is the result of tariff reductions and trade liberalisation.

Also according to this latest report, Tunisia’s external reserves have grown by 1 billion US dollars in 2007 reaching $7.8 billion, the equivalent to 4.6 months imports of goods and services, although Tunisia has consolidated its external position through early payments financed by the resources of privatisation, reducing its total external debt, including short-term debt from, 58.3% of GDP in 2006 to 55.6% in 2007, the budget deficit is expected to stay, according to the IMF team, generally the same as in 2006, despite an increase in world prices of raw materials. The prudent fiscal policy has made it possible to reduce the deficit to 3% of GDP, below the target of 3.1% set in the Finance Act of 2007.

The Outlook For 2008.

On the prospects of the Tunisian economy in 2008, The IMF’s report, affirmed that growth is expected to remain robust at 5.7%. The probable slowdown of the Tunisian economy from 6.3% to 5.7%, will according to the report be, due to the exceptional growth in the energy bill, the expiry of European Union quotas on certain Chinese textile products as well as the restrictive monetary policy. However, the report estimates that the economic momentum and the large investment projects should limit the slowdown. As for inflationary pressures, notably imported inflation, the report predicts that they will persist. The Tunisian Central Bank’s prudent policies, should contain inflation to an average of 4%. The forecast also takes into account the likely increase in administered commodity prices if world prices are to remain high.

The IMF delegation also predicts that in 2008, the current account of the balance of payments could incur a slight deterioration if oil and commodity prices remain near their recent record highs. The report foresees a slowdown in the pace of exports due to the notable downturn in world economy. Imports will probably grow relatively strong, due to the persistence of high oil and raw materials prices and the significant need for capital goods and raw materials. Consequently, a slight deterioration in the current account of 2.7% of GDP in 2008 is expected by the IMF. Nonetheless, the diminishing tendency of foreign debts will continue with the rate of external indebtness passing to 52.9% of GDP.

The Economic Policy In Tunisia.

The IMF’s report raises questions in a generalised order on the economic policies followed by Tunisia. The first question raised was that of the persistent excess liquidity and the rising inflationary pressures. The IMF mission supported the restrictive monetary policies of the TCB and explains its support by the fact that, in view of the excess liquidity situation and inflationary pressures that have resurfaced during the second trimester of 2007, the TCB has carried out an operation of liquidity draining before raising the coefficient of obligatory reserves. “Given the possible adjustments in the economic details to changes in monetary policy, it is important to persevere in the development of forecasting tools in order to better anticipate inflationary pressures and act in time” added the report.

The IMF Advises More Exchange Rate Flexibility.

In the context of exchange rate policy, the report argues that the exchange rate policy should remain anchored in the medium-term to the floating exchange rate objective. “It is desirable to refine the coordination between monetary policy and exchange policy. In this regard, greater flexibility in the exchange rates is necessary to better control inflationary risks” advised the IMF.

The IMF mission supports in all cases Tunisia’s prudent fiscal policies, which has enabled the country to maintain a deficit of 3% despite an adverse international environment. The mission, however, advises to face up to inflationary pressures and that the fiscal policies should target a deficit below 3%. This would help to support the restrictive monetary policy and ensure greater flexibility in fiscal policy.

Ensuring DFI For Major Projects.

The mission also supports the strategy of energy saving actively pursued by the Tunisian authorities. It recommends, however, the consideration of alternative options, less expensive than the subsidies to the General Compensation Fund system adopted by the government, in order to protect the purchasing power of low income families. On the subject of major investment projects which are currently proliferating in Tunisia, the IMF team advises that the authorities should ensure that they do not create new liability elements (contingent liabilities) in addition to the outstanding guaranties totalling 8.9% of GDP in 2007.

Regarding trade liberalisation policy, which has encouraged and favoured the opening of the Tunisian economy, it is moving forward, indicates the report. As far as exports and imports of goods are concerned, they have recorded a rise from 74% of GDP in 1995 to 98% in 2007, allowing for a significant improvement in the coverage rate of imports, which rose from 70% to 90%. In addition, DFI as percentage of GDP, have almost doubled during the same period

The Banking Sector.

The mission’s report mentions other Tunisian policies. In the first instance, the banking sector reforms which is following its course. The strong and energetic growth in 2007 has enabled the banking sector to improve its profitability. The available indicators, although partial, seem to indicate to an amelioration in the banks’ profitability in 2007. Some took advantage of the situation to recapitalise, such as the Amen bank and the BIAT. The banks’ improved profitability should allow them to continue consolidating their balance sheets and improving their prudential indicators. After the significant gains of 2006, the index of ’Valeurs Mobilieres’ TUNINDEX has risen by 12.1% at the end of 2007 resulting in an overall market efficiency of 3%. Also the strong economic growth accompanied by a vigilant supervision should, according to the report, strengthen the capital base of the banks. In particular, it is important to continue the effort of reducing non-performing loans. The banking sector reforms continues with the recent privatisation of the Tunisian-Kuwaiti Bank (BTK) on favourable terms. Other banks may follow. However, the sector remains fragmented, limited in size and its consolidation will be beneficial in the context of increased competitive pressures. The banking service quality built on a legal obligation, has improved and the authorities’ efforts are continuing in order to reach a superior level of standards. In addition further efforts are continuing in order to prepare banks for the move towards the implementation of the Basel II treaty by 2010, as well as a number of measures to invigorate the banking industry, where some of them have recently been adopted and others are to follow shortly.

The liberalisation of current and capital accounts operations which grew in 2007 and where the ceilings on foreign currency allocations for current operations have been identified and the authorisation for exchange to non-residents investors, except in the commerce and distribution sector, has been abolished. There are also constraints on the flow of investment and shareholdings between individuals or companies non-resident and resident to be lightened.

The mission has also welcomed Tunisia’s commitment to play an active role in the Maghreb integration process. The action plan’s measures elaborated during this conference, aim at improving the business climate and foster collaboration among private investors in the region. Regarding intra-Maghrebian trade exchange, Tunisia, concludes the report, has just adopted in 2008 the mutual recognition of conformity certificates of technical standards with Libya.

Revenue From Oil Companies Will Compensate The GCF.

Speaking of Tunisian economy’s strong points, the delegation’s report, did not fail to mention the few gaps within it. One such gap is the record increase in oil prices which had and will have an effect on the economy, and because of the role it plays, the authorities were led to adopt an amendment to the finance bill in December to provide an increase of subsidies to the General Compensation Fund (GCF) of 0.6% of GDP, bringing the total to 1.3%. Rising prices at the pumps in May and October 2007 made it possible to maintain oil grants to 1% of GDP. The increase in receipts from oil companies, non-tax revenues and customs duties, due to the strong growth of imports should more than compensate for the additional expenditure. Refunds should proactively reduce government debts from 53.9% of GDP in 2006 to 51.5% in 2007.

Preatoni Invests 22 Billion US Dollars In Its Ecological Tourist Venture

17th February 2008

Sejnane

According to the government high commission of investments, the Italian Group Preatoni Investments will invest 22 billion Us dollars in an ecological tourist complex in Sejnane in the north west of Tunisia. This high standard complex will include, hotels, marinas, recreational areas as well as parks and golf courses.

The works on this mega-project which will take 12 years to be accomplished are expected to be launched before the end of 2008, added the same source. The project is expected to create some 30,000 jobs.

The group Preatoni’s President and General Director, Ernesto Preatoni was received by the President Ben Ali at the Presidential Palace of Carthage back in October 2007 and is the owner of the hotel chain Domino, which disposes of 40 hotels in fifteen countries. Operating mainly in tourism and real estate, the group has realised numerous ecological tourist complexes including the famous resort of Sharm Al Cheikh in Egypt.

Tunisia a country with limited natural resources, is attracting more and more foreign investment groups, notably Emirati, through several preferential advantages such as the proximity to Europe, political stability and skilled workforce.

The Cap-Bon, Oenological Tourism And Much More!

16th February 2008

A growing number of Tunisian wine makers are increasingly taking interest in oenological tourism as a way not only of promoting their wines, but also to establish potential commercial ties with European customers and wine retailers.

Even if oenological tourism is still relatively new in Tunisia , it is attracting more and more tourists who are keen to visit the wine caves of Grombalia, Bouargoub, Tebourba, Mornag and Kelibia. These visitors who are also prone to cultural exchanges, authenticity and gastronomy, often become Tunisia 's best ambassadors in terms of making better known the products of Tunisia 's sun-gorged, millenary vineyards.

A number of tourism agencies specialising in ‘niche' tourism, are already selling Tunisia's wine treks and are constantly updating their wine map of the best sites to visit, be they ancient castles, museums, wine domains or new vineyards offering wine tasting sessions.

In doing so, Tunisia hopes to become a well-known Mediterranean destination for oenological tourism, similar to France which is attracting some 7 million oenological tourists a year, making it the world's first destination in this attractive and lucrative type of tourism.

In this context and in the framework of its cultural and tourism activities, VINITEC organises in collaboration with Mr Ahmed Kadbour, a wine expert and a member of the Brussels international jury; and Mr Mounir Daoudi author and designer of the Tunisia Caves Rally, discovery excursions through the vineyards and cellars in the Tunisian Cap Bon of vine cultivation and wine production in the region.

During this tour, tourists will get to visit in exclusivity the ancient Caves and the ultramodern art of ‘Chais’ in order to discover the Cape Bon’s native origins. A day in the wine cellars and old caves, with original and memorable allowances, which will be accompanied by a tasting session, lunch, and photographs exhibition which tells the history of wine making in Tunisia. The visitors will also get to see the old labels collection of bottles dating back to 1871. The tour of the vineyards will be informally commented on by the Rally of the Cellars’ team, as well as a selection of specific visits within the region…

These selected specific visits will target the citrus orchards of Menzel Bouzalfa, the insectariums of Beni Khalled and the training centre on an organic farm in Takelsa. The orange groves which hide behind the curtains of cypresses emphasise the traditions and the reputation of the area as the capital for citrus fruit cultivation. The landscape where the thousands of hectares of citrus trees are, is very captivating, here the visitor will be charmed by the purity of the skies and the beauty of the orchards’ splendid panorama. In this part of the world, citrus, this marvellous product of the Mediterranean civilisation, is a heritage that has been passed from generation to generation for thousands of years.

The guests will also be invited by the owners of the orchards and their families to taste the different varieties of oranges, jams, citrus based cakes, fresh orange juice as well as being treated for a lunch on the farm.

CIAN : French Companies In Tunisia Are In Good Shape

16th February 2008

The increase in turnover of French companies operating in Tunisia has been very strong over the past two years and 2008 promises to be even better, according to the latest report by the French Board of Investors in Africa ’CIAN 2008’. Indeed, the CIAN barometer indicates that, 7 French enterprises out of 10, say that they have registered an increase in turnover in 2006 and 2007, and that this proportion of companies could eventually rise to 9 in 10, in the current year.

The report has also indicated, that the financial results of 8 in10 enterprises could make a profit in 2007, as well as in 2008. As for investments, they reflect the economic dynamics prevailing in Tunisia, since 2007, 6 out of 10 investors have declared the resumption of their investments in the country.

The CIAN report stresses, that the business environment in Tunisia is positive and favourable, with an overall rating of 3.2 over 5, which is the highest rating in the Maghreb region. The road network, port and airport infrastructure, telecommunication, taxation, control personnel and labour, security, the impact of the informal sector (the lowest in the Maghreb) and the environment protection receive the best marks.

The report underlines that, ‘the Tunisian administration provides entrepreneurs with the appropriate services, effectively and efficiently and the factors of production costs are at a good level.’

The French Board of Investors in Africa (CIAN) is in effect the Patrons’ Association of French Companies who have invested in Africa or expanded an important existing business. The barometer CIAN, compiled from a survey of businessmen and investors in French Africa, gives future trends of the business climate in every country in the continent.

The total number of French enterprises implanted in Tunisia stands at 1174 companies generating more than 104,000 jobs.

Tourism : High Hopes With A More Diverse Product

15th February 2008

The tourism department is planning to spend 135 million dinars over the next five years (2007-2011), an investment which will be going towards creating new tourist zones. These amounts are broken down into, 94.2 million dinars to the seaside, 32.6 million dinars for the thermal, 6.4 million dinars for the ecological and 1.5 million dinars for the Saharan.

Four stations will be considered as a priority and will benefit from the investments in the first round of spending, these will include:

Cap Gammarth in the northern suburbs of Tunis, which will benefit from residential, tourist and sports complexes built on 68 hectares with 6,000 beds capacity.
The ecological station of Sidi Foun’Khel on the island of Kerkennah near Sfax, covering 72 Hectares.
Thermal tourism, notably the Grand Korbous station in the Cap Bon, currently in the construction process, spreading over 245 hectare and have a capacity of 6,000 beds, will specialise in the health and recreation tourism.
A station specialising in Saharan tourism will be realised in Tataouine in the Tunisian extreme south, with a bed capacity of 1,550. The station will be irrigated on an area of 29 hectares.

Mr Raouf Jomni, Executive Director of the ONTT (Office Nationale du Tourisme Tunisien), stressed that the administration’s efforts are focused on ensuring a high quality in the services provided by the Tunisian centres, putting emphasis on the progress of the study underway on the thalassotherapy product development. (Noting that Tunisia is the world’s second destination for thalassotherapy after France.)

Giving the aim of promoting the product balneotherapy in several markets, the reality and the prospects for the commercialisation of the product thalassotherapy has been the subject of a working session held recently in the office of the ONTT, in the presence of Tunisian officials from the balneotherapy centres and representatives from the Swiss travel agencies specialising in this field. Emphasis was placed during this meeting, on the strengths and weaknesses of the thalassotherapy centres which contribute to the Tunisian tourist product diversification and the rehabilitation of its added value.

On another front, Mr Abderrahim Zouary, minister of transport, has announced on November 6^th 2007, that a tender will soon be launched in order to select an investor who will take on the task of extending the Bizerte marina. Tunisia has adopted a strategy for developing , all along the Tunisian coast (1300 km), cruising and recreational activities.

At present, Tunisia’s marinas host only 1%, roughly 2,500 boats per year from a total of 270,000 pleasure boats in the world. The country accounts for 8 marinas of which 6 are operational and 2 in the course of construction. The overall capacity of these marinas is approximately 2,100 boats. The most frequented tourist resorts, feature at least one marina. Tunisia has marinas at, Port El Kantaoui (300 berths), Monastir (400 berths), Sidi Bou Said (380 berths), Bizerte (170 berths) and Hammamet Yasmine (750 berths.)

More Than 2 Billion Dinars In DFI In 2007

14th February 2008

In a statement to the Chamber of Deputies, Mr Mohamed Nouri Jouini, Minister of Development and International Cooperation, has affirmed that the volume of Direct Foreign Investments (DFI), registered in 2007, have exceeded the 2 billion dinars, or 2157.9 million dinars to be precise, excluding privatisation receipts.

Addressing the deputies in a debate focused on investments and mega projects, the minister added that, these investments have recorded an evolution of 35.7% compared to the results registered in 2006 (1589.7 million dinars). These results were achieved thanks to the favourable business climate and the good reputation enjoyed by Tunisia in several international forums and organisations, he added. The investments realised, have allowed for the creation of 20,000 new jobs, the equivalent to 24% of all jobs created.

The Hall of El Balar : The Office of the Chamber's President

Equally, they have permitted for the implantation of 271 new foreign enterprises and the expansion of a further 222 enterprises already in existence, taking the total number of established foreign companies in Tunisia to 2900, employing some 291,000 people.

He stressed that the manufacturing sector accounts for the lion’s share of DFI. The volume of Direct Foreign Investments registered in this activity stands at 485.7 million dinars, a rise of 39.8% as compared to 2006. The service sector comes in second place with a volume of DFI estimated to be at 146.4 million dinars, a rise of 32.1% compared to 2006, which is pretty much in line with Tunisia’s objective of becoming a regional and international centre for services. Contrary to all expectations, the DFI realised in the Textile sector have also registered a notable development. They reached the volume of 90.3 million dinars in 2007, against 71.8 million dinars, a rise of 25.9%, this is despite the end of the quotas regime for Chinese exports to the European Union market.

The Hall of the Throne : The Old Chamber of Deputies

As for the tourism sector, Direct Foreign Investments have almost tripled compared to 2006, reaching 72 million dinars in 2007, against only 18.3 million dinars in 2006, a rise of 293.4%.

The FRN, Borj Cedria - Tunis Will Cost 97 MD To Install

14th February 2008

A consortium led by the French group Alstom has been chosen by the ’ Societe Nationale des Chemins de Fer Tunisiens’ (SNCFT) to install the infrastructure for the Fast Rail Network (FRN) linking Tunis to Borj Cedria

The total price of the contract awarded to the consortium is in the order of 97 million dinars (54million euros). Alstom will oversee the realisation of a sub-station which will feed the network with electricity as well as currying out the building of the double rail tracks which will run for 23 kilometres. The FRN will allow for the transportation of more than 20,000 passengers per hour between the southern suburbs of Tunis and the capital. It will be operational by 2010. The SNCFT has recently awarded another contract to a South Korean consortium to the tune of 188 million dinars for the acquisition of 76 ultra modern and stylish passenger cars of 41 metres in length, which will be delivered in 2009.

Meanwhile, at a ceremony held Tuesday, February 12^that the Ministry of Foreign Affairs, Mr Mohamed Lessir, Director General of Political and Economic Cooperation for Europe and the European Union, has signed the Tunisiso- French protocol relative to the financing of an acquisition project of 9 light metros of the CITADIS type, at the price tag of 23.7 million euros with the French Ambassador to Tunisia, Monsieur Serge Degallaix.

The signing of the protocol reflects the quality, dynamism and the density of the privileged relations between the two countries.

Tunisian Tourism : The Missing Links!

13th February 2008

Hotel Golden Tulip Carthage

Tourism contributes around 7% of Tunisia's GDP and is the country's largest foreign currency earner, making up 17% of the total. The industry, which is starting to promote the country's 3,000 year-old-heritage, sports, golf, spa, adventure packages and eco-tourism to attract a new breed of visitors, as well as retaining its traditional beach holiday market, provides jobs for an estimated 400,000 Tunisians. Investment is pouring into the sector, a nod to the country's future potential, with a number of major Gulf-based real estate companies developing projects in the country – for example, Emaar Properties’ Marina al-Qusor, which will contain six hotels ranging from four-star to boutiques. Indeed, the investment climate in Tunisia is favourable – a new business can be set up in as little as a fortnight.

Statistics published by the CETO, the French association of tour operators and the travel agency FRAM, show that the Tunisian tourism industry appears to have performed well in 2007. The CETO figures show that the number of French nationals who have visited Tunisia has risen by 3.8% while the number of French tourists visiting Morocco has regressed by 2.8%. As for the figures published by FRAM, they show an even greater increase of 5% of French tourists visiting Tunisia against a fall in the order of 2 to 3 percentage points for Morocco. However, although favourable, the indicators are merely a ‘prima facie positive‘, in reality they hide a number of weaknesses. As discussed in previous reports on the No Marmite site, the analysis of the European clientele show a fairly significant decline in the number of tourists coming from the traditional European markets such as Germany, Italy, and the UK. In addition and perhaps more importantly, visitors are only spending on average $333 (per tourist), compared to $850 in Egypt and $1040 in Morocco. Nevertheless, modest as it may be, the sector still managed to post an annual growth of 3%.

According to the Oxford Business Group, the challenges are principally structural in nature. The low level of tourists who decide to return to Tunisia is often attributed to a second-class service and the poor quality of provision in most hotels. The Tunisian monetary authority, the Central Bank, has even acknowledged the facts in its annual report, according to which, despite the efforts made by public authorities, the results are below the objectives set and ’ players in the sector must strive to ameliorate and improve the quality of services, which is a major element of competitiveness.’

Certain professionals raise other challenges. According to Fitch Ratings, the sector’s capacity does not cease to rise, in terms of accommodation parks and tourist beds, leading to a situation of overcapacity, particularly at the seaside hotels, which implies a certain dependency of hoteliers on tour operators for the leasing of the rooms. A professional in the field told the Oxford Business Group ‘ despite the efforts of diversification, Tunisia fails to shed its image as a seaside destination.’ Victim of the seasonal rhythm, Tunisia must diversify the activities and infrastructures and exploit further riches that the country offers. "Tunisia has the means and skills, but the country does not develop and does not sufficiently promote its tourism sector on the international market," he added.

The Tunisian Federation for Hoteliers, it too, denounces the luck of communication. According to Mohamed Belajouza, the federation’s President, "the promotional budget is not an expenditure but a rewarding investment in the very short term. For every thousand dinars (770 dollars) invested, we can reap at least its double in foreign currency. This has been proved in the past, and we could demonstrate it yet again," he told the local press.

The national authority for tourism knows only too well, that the sector needs to move forward, to that end, the National Tourism Office in collaboration with the Ministry of Tourism have put in place three working groups with the Hoteliers Federation, in order to assess in depth the quality, training and the financial situation of the sector. The national Programme for the upgrading of hotels has identified in its first phase, 45 hotels in need of rehabilitation. By the end of the process, a further 150 hotels were also considered for the scheme. The President of the republic added his weight to the debate and called for the development of a national strategy to regulate the industry until 2016.

The Oxford Business Group’s report concludes, that if Tunisia is serious about improving its competitiveness, it must diversify its activities beyond seaside tourism and take advantage of its cultural heritage. Measures and steps have been taken in this direction. In 2001, the World Bank has injected 25 million dollars for the realisation of a cultural project, more recently, 30 million dollars have been allocated to the development of the Carthage and Sidi Bou Said national park. Compared to the billions of dollars destined for the real estate developments in Tunis, these sums seem modest.

Tunisian-French Cooperation In The Tourism Section : Know-How To Share!

11th February 2008

At a press conference held Monday February 11^th at the ministry of tourism headquarters by the Tunisian Tourism Minister Mr Khalil Lajimi and his guest Monsieur Luc Chatel the French Secretary of State in charge of consumption and tourism and following the bilateral talks, the two officials briefed members of the press on the progress made regarding the tourism cooperation agreement, which was signed between the two countries in December 2003 and the perspectives of developing the cooperation for the next five years as well as the preparations for the second summit 5+5 of tourism ministers of the Euro-Mediterranean zone, which will be held in May 2008 in France as a follow up to the first edition which was held in Tunisia in 2006.

The French Secretary of State has reaffirmed that “ My visit has allowed for the renewal of the cooperation agreement signed in 2003, it will permit us to update and realise the old exchanges and reinforce cooperation between the two countries, as well as fostering new strategies in France and in Tunisia. We are obliged to take into account the rise of new competitors and the new range of products for both our markets, we are here to lend our know-how, and benefit from the Tunisian experience in other areas, what we want, is to accelerate and go faster.”

The agreement further strengthens professional development as part of the ONTT’s (Office National du Tourisme Tunisien) strategy for training and modernisation. The two parties agreed to encourage the sending to France, of those wishing to receive their training in the sectors of gastronomy and hostelry.

The agreement signed in 2003 and updated at the meeting, includes in edition to vocational training, a plan ‘ France Quality Tourism’ under which a number of arrangements will be made with the aim of making better known the nature, mechanisms and the functioning methods of the French program. Within the same project, a study of the feasibility in the field of aero-tourism has also been on the agenda.

Asked for by the Tunisian side, the study targets the development of aero-tourism, notably by creating multi platforms including residential, training, business, etc…where French expertise is desired in order to define the terms and references of the project’s feasibility. Other elements of this agreement are notably ’ marinas and cruises’, ’upgrading’, ‘cooperation in the domain of spa and thalassotherapy’ and the establishment of a data bank for touristic entertainment and recreation.

The Tunisian minister said that “Our country shares the same vision as that of France and our cooperation will only push us forward. We in Tunisia, are experiencing tough competition from the other countries on the southern shores of the Mediterranean. Today we are forced to diversify our product range in order to attract a better clientele on both levels, quantity as well as quality.”

The French official has indicated to the existence of a synergy between French operators conducting their business in Tunisia and the ministry of tourism, “ I was struck by the adhesion of French hotel operators in Tunisia with that adopted by the state. One vision unites them and they have the same objectives, we must promote top of the range products and services such as Thalassotherapies and golf’ he declared.

The French official’s visit aims at preparing the newTourism cooperation agreement just ahead of President Nicolas Sarkozy’s state visit to Tunisia, scheduled for next April.

Enlargement, Upgrading And Creation Of New Industrial Zones, As Scandinavian Multinationals Are Targeted

10th February 2008

Mr Hedi Djilani President of the UTICA was accompanied by Mr Mounir Mouakher, President of the Tunis Chamber of Commerce and Industry, to open up a debate with Scandinavian countries over the ways in which to develop the possibilities of implementing cooperation and exploit opportunities between the Tunisian and the Norwegian business communities as well as promoting economic exchange and bilateral commerce.

In this context, Mr Djilani has emphasised the importance of increasing Scandinavian investments in Tunisia, in particular the implantation of Norwegian multinationals. This, in parallel with the important and significant flow of Arab capital which Tunisia continues to attract. The UTICA President has added that Tunisia, thanks to its geographical location and its political and economic choices, can only be an important platform in the region for foreign investors wishing to invest in the Maghreb and African countries. The Oslo Chamber of Commerce’s President has saluted the economic development which Tunisia is experiencing these days and has confirmed the willingness of his country to further develop Tunisian-Norwegian relationships.

It is important to note in this regard that, Norwegian businessmen are busy organizing targeted visits to Tunisia in order to identify the opportunities of partnerships and cooperation that are available to Norwegian investors and businessmen notably in the sectors of renewable energy, tourism, medical and communication technologies.

Elsewhere and in order to stimulate and promote investment notably in the sectors of high value added activities favouring the creation of new enterprises, a ministerial council was held on Friday February 1^st chaired by the President of the republic dedicated to the development and upgrading of the industrial zones has allowed to define a complementary and coherent program which will represent a platform, adapted to answer the needs of investors and support the dynamics and sustainability of a durable development and even reinforce the national priorities in the fields of investment and employment.

The measures adopted concern notably the enhancement of private sector development of the industrial zones throughout the country. Currently, the country disposes of 121 industrial zones covering an area of 3,807 hectares, the 10^th plan (2007-2011) envisages the development of 35 new industrial zones spreading over 677 hectares of which 8 will be developed by private operators. Equally, the private sector will proceed with the development of an additional 150 hectors of industrial zones inside the technological poles and a further 100 hectares of extensions in the spaces of economic activities in Bizerte and Zarzis respectively. In all, an area roughly spanning 927 hectares will be developed. The important issue to raise in this context, is the private sector involvement in this process, where some 516 hectares or 56% of the total area will be developed by the latter. Equally, it is expected that a further 75 industrial zones covering an area of 2,776 hectares will benefit from an upgrading and rehabilitation program. This essential and important orientation should allow to further mobilise direct foreign investment, be it in the industrial or the service sectors.

The Launch Of TheTunis Financial Harbour Is Imminent

8th February 2008

In a communiqué released on the Dubai stock exchange website on Tuesday February the 5^th, the Bahraini group Gulf Finance House (GSH) announced the launch of the studies relative to the creation of the Tunis Financial Harbour (TFH) in the golf of Tunis.

“We have begun the preparations and launched the process of obtaining the necessary authorisations from the authorities concerned in the hope of starting the project during the course of this year” declared Mr Esam Jenahi, President of Gulf Finance House. “We are very excited with this vital project which is our first investment in Tunisia. This project puts us top of the list of international investors in Tunisia. We are convinced that the Tunis Financial Harbour, will contribute in a significant way to the support of the Tunisian economy and will be considered as one of the main strategic elements of the economy’s infrastructure,” added Mr Jenahi.

Back in December 2007, the No Marmite site reported on the Gulf Finance House’s plans of establishing a financial centre in the gulf of Tunis (Tunis Financial Harbour), with an investment valued at around 3 billion US dollars, TFH marks the entrance of GFH to Tunisia and puts it amongst the biggest international investors in the country.

Gulf Finance house who signed an agreement protocol only few weeks ago with the Tunisian government, is one of the leading Islamic banks in the region. Its activities focus on infrastructure development projects in the countries of the Gulf Cooperation Council, the Middle East, North Africa and other emerging countries. GFH, also specialises in identifying investment opportunities in equity and asset management for its clients in the Gulf region.

Tunis Financial Harbour will comprise four key components, in addition to the hosting of a wide spectrum of professional enterprises as well as other supporting activities. These will include, notably, a corporate centre, a centre for investment banking and consultancy, an insurance centre and transactions centre.

Spreading over an area of 450 hectares, the Tunis Financial Harbour offers in its initial phase of development a marina, a commercial complex, a residential complex in the form of high standard villas, commercial and professional premises, a gulf course and a stadium. The project will equally include a business school of international class. It is estimated that the Tunis Financial Harbour will help create thousands of jobs and will generate several billion dollars annually for the Tunisian economy.

Tunisia The World's Third Most Beautiful Place To Visit

7th February 2008

Ain Draham

Not long ago, the American travel guide, Trip Advisor, elected the Island of Djerba in the Tunisian south as the world’s number one emerging destination for 2008. Shortly after came the ranking of Tunisia as 3^rd touristic destination in the world by the American newspapers, The International Herald Tribune and The New York Times, which have also positioned the country amongst the top 53 most admired places world wide. Hot on the heels of these prestigious titles, the latest accolade to come Tunisia’s way, is its ranking as 3^rd most beautiful country to visit around the world.

The New York Times’ list of most beautiful places to visit in 2008 which has just recently been published, puts Tunisia just behind Portugal’s capital, Lisbon and Laos in south-east Asia. Mauritius comes in fourth position, followed by Miami Beach and South Beach, Miami, the Maldives, Death Valley in California, Courchevel in France and finally Libya which comes in tenth position.

Middle Eastern destinations, such as Iran and Kuwait City are featured in the top 50 of the New York Times’ list. The Cities of London and Liverpool in the United Kingdom, are also ranked in the top 50.

Tabarka

On a personal note, as a Tunisian I feel great pride, enormously honoured and deeply touched, it seems that at last my country is getting the recognition it deserves, with its marvellous climate, rich and diverse landscape and scenery, colourful history, culture and traditions, I must confess, these conclusions reached by these well renowned and most respected media institutions, were never in doubt, it is now up to the Tunisian authorities and the countries’ men and women to build on these successes and go from strength to strength. With the right personnel, great deal of patriotism, enthusiasm and vigour these honours awarded to Tunisia could potentially play a big role in the county’s drive towards perfection, superiority and distinction and can only add to the economic upsurge that we are witnessing in Tunisia these days.

Another 10 Billion Dollars Of Arab Investments

6th February 2008

The flow of Arab investment towards Tunisia does not seem to be stopping. After Sama Dubai’s 18 billion, Bukhater’s 5 billion, GFH’s 8 billion, another group from the United Arab Emirates, announces yet another mega project.

Even if all of these projects, by looking at their models and their promotional films, look more like a dream, beautifully presented images and perspectives of urbanism and employment, they are not far from reality and ultimately an eventual certainty.

The latest comer, is no less than the ‘Al Maabar International Investments Company’. Importantly, the group is not a novice on the Tunisian market. Yousef Al Nowis, member of the advisory board, recalls in fact, during his brief presentation of the $10 billion project at a press conference, anterior projects realised in Tunisia by the group, in Port El Kantaoui and Dar Naouar - a statement which is designed to show the credentials and the seriousness of this group whose capital is in the order of 150 billion US dollars and which is expected to double soon, according to a reliable source. The group was created in February 2007 by one of the largest property development companies in Abu Dhabi in order to foster the creation of projects outside the United Arab Emirates. ‘Al Maabar’ is currently carrying out projects in Morocco, Libya, Kazakhstan, Belarus, Malaysia, Egypt and Sudan.

The AL Maabar’s proposed project is expected to be the largest on the African continent and will be called ‘Bleb El Ward’. It will be located on the ‘Sebkhat Ariana’ (previously known as City of Roses) on the northern shores of the Tunisian capital which the group is hoping to acquire for a symbolic price. The project will cover 5,000 hectares and it will cost an estimated $10 billion.

The concept of this new project, will be in the form of islands on the Ariana lake and will open towards the sea, part of which had been the subject of recommendations by the United Nations’ programme for the environment. This mega project will include a medical city and centres for medical research which should consolidate the health tourism activities in Tunisia. It will be surrounded by a business centre boasting cutting-edge technological infrastructure of a grand nature, a huge tourism project in the form of high standard, all comfort villas and by no less than three golf courses. All of this new, yet unborn city, should be able to accommodate 6,000 people and provide jobs for up to 10,000 workers. The marketing of the entire city, will also be undertaken by the promoters who will call for Tunisian enterprises’ expertise to conduct the necessary studies.

The project aims at developing a new city which is modern and integral including, notably, internal waterways, residences, tourism centres, commercial and sports recreations and a number of parks and green spaces. It should also allow Tunis, according to its promoters, to gain 50 kilometres of beaches in the form of inland waterways.

Yousef Al Nowis, appears to be aware of the ecological challenge facing the project in order to preserve the balance of the ecosystem. He said, in this context, that “the group resorted to the most advanced technologies for the realisation of this project. The sketches were drawn up in California by American teams.”

The first instalment of this project, christened ’Diar El Fell’, and which includes a sports city and residential complexes, will be completed in 5 years. ’Diar El Fell’, spreads over 300 hectares of which 110 are waterways and will be realised at a cost averaging $2.83 billion. The project which is expected to start in the course of the first semester of this year, will take 20 years for it to be accomplished in its entirety.

For this to happen the group must await the signing of the agreement and the formation of the company in Tunisia. In this regard Mr Al Nowis said that “the discussions and the negotiations are going well!”

In a press statement made after the presentation of the project, Monday morning, to the President of the Republic, in the presence of Sheikh Zaid Bin Abdulah Al-Nahyen, Foreign Minister of the United Arab Emirates, Yousef Al Nowis, Managing Director and General Manager of Al Maabar International, stressed the exceptional character of Bab El Ward. Unique in its genre on the southern Mediterranean shores, the project as a whole offers, perfect harmony between, the workplace, residence and well being, in a privileged setting that emphasises nature and the environment. The Tunisian minister for the environment, with whom the promoters have held more than one meeting, will be the guarantor.

Tunisia - France : Strategic And Above All, Historic Relations Between Old Friends

4th February 2008

France, Tunisia’s historic and strategic partner continues to relocate to Tunisia. In an interview with the media, Monsieur Degallaix France’s ambassador to Tunisia has said: “We have a partnership that is traditionally strong, with 30% of Tunisian exports going to France, we are Tunisia’s number one customer, also, we are the first in terms of the number of investors with 1200 enterprises representing 40% of companies implanted in Tunisia. The French owned enterprises provide over 100,000 jobs in Tunisia, in effect we create one company every five days and we will be creating an additional 10,000 jobs this year“.

He adds “the strength of our partnerships is not new and is based on a solid and strategic basis, evidently, it is for companies to maintain this partnership so that it remains very strong. We are trying to develop the sectors of partnerships towards different activities other than the textile, such as the industries of electro-mechanical, electronics, aerospace…and technologies in general because it is an area which is developing very well on both levels, as well as industrial manufacturing and office studies, and I think that this gives a new momentum to this investment partnership, also, on the level of trade, in 2008 Tunisian exports towards France are more substantial than that of France’s Towards Tunisia“.

Asked about the role that Tunisia could play in the proposed Mediterranean Union (MU), the ambassador replied: “Tunisia’s role in the Mediterranean is central considering its geographical and economical place. Tunisia is conducting an active and balanced diplomacy, it has excellent relations with southern and northern countries of the Mediterranean. As soon as monsieur Sarkozy was elected, and called for a Mediterranean union, President Ben Ali had publicly welcomed the idea. He saluted once more on November 7^th President Sarkozy’s initiative who in turn made Tunisia his first Mediterranean country to visit. For the time being, we are in the process of gathering ideas and reactions, and we will be moving quickly to a more operational phase with the other heads of states.”

Tempting labour costs and especially skilled workforce makes Tunisia the place of choice for many foreign investors, indeed the relocation of French companies to Tunisia such as Latecoere, is neither random nor a stroke of luck, it is simply skills and competences!!! Tunisia’s skills par excellence are by now well documented and recognised. According to fpragny, in the “moci” the relocation of French industry to the Maghreb is not about to stop. Tunisia, whose economy is growing steadily (6% in 2007), offers attractive labour costs. But above all a skilled workforce and an administration sufficiently ‘oiled’ to facilitate the implantation of foreign companies.

Latecoere’s case is not isolated. In aerospace, automobile and electronics, Valeo, Faurecia, Zodiac and Sagem are equally implanted, the government has launched several reforms in recent years aiming at improving the economic environment in the country and strengthening competitiveness. The government has also devoted its efforts to the sectoral diversification of the FDI, in particular in the energy sector and electronics industry, automobile components and the activities related to new technologies in information and communication. In 2006 Tunisia set itself a target of 1.3 billion dinars of Direct Foreign Investment (DFI) for 2007, for the period 2007-2011, the DFI is estimated to be 7.8 billion dinars, against 5 billion dinars over the period 2002-2006.

Will The Tunisian Olive Oil Regain Its International Place?

3 February 2008

Tunisia is the world’s 4^th largest producer of olive oil as well as a leading exporter (ranking 3rd.) Despite this the Tunisian product is virtually unknown amongst consumers in Europe, the Americas and Asia. In fact less then 2% of exports are packaged. The majority is exported in bulk. It is often processed or mixed with other oils and passed under different appellations.

The situation is all the more worrying as olive cultivation is gaining new territories to satisfy the world’s ever rising demand for olive oil. At a time when new competitors are emerging, such as Syria (46 million olive trees), Turkey (83 million olive trees), the far away Australia and especially Argentina; nothing seems to be done in Tunisia to develop the local industry and strengthen Tunisia’s olive oil industry on the international scene. The overwhelming majority of Tunisian oil distilleries do not possess an analysis and control unit. Europeans, Tunisia’s main market appreciate the extra virgin olive oil. Only 25% of Tunisian olive oil falls into this category as compared to Europe’s production which is estimated to be at 75%. These weaknesses are likely to persist if Tunisian producers continue to work at the same pace, with the same reflexes and the same personnel. For a country with the oldest orchards in the world, it is incomprehensible that until now it does not possess even one training centre for olive cultivation businesses.

The promotion of Tunisian packaged olive oil must now be a priority and a strategic option, due to the importance of international competition and the considerable advance made by certain foreign competitors. According to plans drawn by the industry, the share of packaged olive oil in relation to the total quantity exported, is expected to rise from 1.5% at present to 10% by 2011, representing an annual increase of two points starting from 2007. Otherwise expressed, from 2,000 tonnes in 2007 to 13,000 tonnes by 2011. The number of packaging units which are currently active is of 24, with a production capacity of 15,000 tonnes, today, however, only 2,000 tonnes are packaged. This under-use of capacity shows the lack of effective marketing, nonetheless, many producers are beginning to show the desire to make themselves known on the international level and conquer new markets. Some have expressed desire in establishing an AOC (Appellation of Origin Control) and give the product a designated territory.

In fact, this situation has prompted the establishment of a national strategy which will focus on the quantitative as well as the qualitative components in order to promote and better position the industry on the foreign markets. However, for certain professionals, elements of this strategy deserve some reflections, because the results do not necessarily materialise as stressed by Mounir, an olive grower in the region of Sfax, who produces 45% of Tunisia’s olive oil and has more than half of the national infrastructure for olive crushing. This professional raises the enormous amounts of catching up that the Tunisian olive oil industry will have to make in the field of quality labelling: “While at home we are still awaiting the vote on the law on quality and the decrees of application thereto. In Morocco, a policy of plantation and of differentiation are taken across the board. Chile, a producer without tradition or scope in the domain, has overtaken us from the view point of promoting and marketing of its brands, particularly in the field of bottling and packaging with the impact that we know about maximising value added. On another level, Tunisia is regarded as a unique taster approved by the International Olive Oil Council (IOOC), which raises questions about the training policy of national tasters agreed on a global scale. Also,Tunisia has only one single laboratory approved by the IOC, while in France, a tiny producer, without image (4 thousand tons of olive oil, equivalent to the production of a single large oil distillery in Sfax), there are 4 tasters and at least 3 laboratories accredited by the IOC, more importantly, 7 appellations of origin thanks to a well dressed recovery strategy for the French product.”

TCB Meeting : Decision To Keep Interest Rate Unchanged

3rd February 2008

The international economic environment in early 2008 has been characterised by rising fears of a sharp slow down in economic activities and even the probability of an outright recession in the American economy, following the persistent crisis caused by the credit crunch brought about by high risk mortgage lending in the US, which have provoked massive disruptions on the world stock exchanges. Events which prompted the American Federal Reserves to cut its key base rate by ¾ of a percentage points following an emergency meeting, in addition to the plan for economic revival introduced by the American federal government.

The events of the situation faced recently by the French bank “Societe Generale”, however, seems to have revived the climate of instability on the world financial markets, despite the measures taken on both, monetary and economic levels.

On the Tunisian level, the results achieved in 2007 were pretty much in line with the objectives set. Nevertheless, the unstable global environment, characterised by the multiplication of growth slow-down indicators, particularly in the USA, the continuous rise in commodity prices and the stubbornly high prices of hydrocarbons, engenders pressures on economic growth perspectives and on the overall balances for 2008. The elimination of these pressures necessitates continued efforts in order to intensify the upgrading programs in all sectors and to better exploit the available capacity in the agricultural sector and the activities orientated towards export, the improvement of productivity and the compression of the various costs components to preserve the internal and external balances as well as maintaining the budget deficit and the current balance of payments to the level of the budget forecast.

On the monetary front, the Central Bank’s efforts will be focused on the pursuit of a continued control over the rate of increase in the money supply. In this context, the Central Bank has already proceeded in increasing the rate of compulsory reserves from 3.5% to 5%, in order to reduce excess liquidity and control inflation, noting that the latter did not exceed 3.1% in 2007.

With regard to the dinar’s evolution on the foreign exchange markets since the beginning of the year and up until January 25^th, it shows an appreciation of 0.6% against the US dollar and a depreciation of o.1% vis-à-vis the euro. In the light of these developments, the Board recommended a continuous monitoring of the global economic environment as well as the fluctuations on the financial markets in order to contain their repercussions on the national economy and decided to keep the key interest rate unchanged.

Tunisia Solicits A Doubling Of EU Direct Investment Within The Next Three Years

1st February 2008

Direct investments from the European Union in Tunisia are expected to double in the next three years following this month’s lifting of tariffs on manufactured goods. Mr Afif Chelbi, the minister of industry has declared that “our industry has just entered an historic period and we hope to develop a platform for the Euro-Mediterranean zone.”

He added that the export receipts should rise to 20 billion dinars by 2011, compared to 15 billion dinars last year.

EU investments in Tunisia, totalled 400 million dinars the previous year. The European Union wants to contribute to the southern Mediterranean economic stimulation, after decades of feeble growth in the private sector that led to widespread unemployment among young people and encouraged illegal migration.

In 1995, in Barcelona, a target was set for trade liberalisation within the Mediterranean zone, but although the food, textile and automobile industries are developing and did manage to provide a breakthrough in attracting European companies, it remains very far from achieving its desired objectives. France, Italy and Germany have already absorbed nearly two-thirds of the manufactured and processed goods in the south.

This month’s removal of trade tariffs on manufactured goods, clears a major hurdle for labour intensive European enterprises wishing to relocate their production to take advantage of Tunisia’s low labour costs.

“Tunisian companies have kept their competitive advantages,” declared Mr Chelbi. “They respond to the European market by providing high value added products with short delivery time.”

On the positive side, European companies say they are attracted by Tunisia’s regulatory framework, its banking facilities and its qualified workforce. On the negative side they mentioned, delays in deliveries and logistics reliability.

The minister stressed that investments in the manufacturing sector are expected to double to 800 million dinars by 2011 and will contribute to the creation of 100,000 jobs.

Life In Tunisia For British Expats