NO MARMITE IN TUNISIA

Many of you know me, or have already met me, during the times that I am out in Tunisia! 

You will also know of my love for my home country and immense pride when I hear of the many new developments or new achievements that are happening out there.  Some of you have already phoned or emailed me to ask my advice on investing in the country!  I will therefore, be writing a regular column for the Marmite site on business, investments and opportunities in Tunisia. 

Any comments or suggestions, I would love to hear from you.  Please email these on man.inthehat@yahoo.fr

• Housing Rights For Mothers Who Have Custody Of Their Children Remain Sacred
• An Energy Balance Trade Surplus In 2007
• The Tunisian Economy Gets The IMF's Nod Of Approval
• The Cap Bon : Oenological Tourism And Much More!
• Tunisian Tourism : The Missing Links
• Tunisia, The World's Third Most Beautiful Place To Visit
• Another 10 Billion Dollars Of Arab Investment
• Will The Tunisian Olive Oil Regain Its International Place?
• A Doubling Of EU Direct Investment Within The Next Three Years

Archives

November 2007
December 2007
January 2008
February 2008

11th May 2008

Emaar Properties PJSC plans to develop the Dh 6.7 billion ($1.88 billion) Marina Al Qussor project on Tunisia's eastern coastline.  The 442 hectare Marina development is located within the county of Sousse towards the southern end of the ‘Golfe de Hammamet’ and will offer a mix of living options and tourist attractions with a large Marina Village at its centre.

The project will add a premier tourist destination on the southern shores of the Mediterranean away from the hustle and bustle and yet be closely located to Tunisia's key cultural sites for tourists to explore.

Speaking at the event Alabbar said: 'We are honoured to present the ‘Marina Al Qussor project’ to Tunisia's President Zine el Abidine Ben Ali. Tunisia is a country rich in heritage and we look forward to the opportunity of adding to its world class attractions with the development of Marina Al Qussor.  This project is a timely addition to Tunisia's thriving tourism industry which has been attracting the world's attention.'

'The presentation sees us looking at other parts of North Africa for the development of our master planned communities and lifestyle options that have become synonymous with Emaar. With its thriving tourism industry, Tunisia is a significant market for Emaar to roll out such communities that offer everything from a thriving resort atmosphere to a quiet retreat,' said Alabbar.

Emaar's Marina Al Qusoor development is in line with Tunisia's tourism policy which is currently focused on residence tourism which enables high end tourists to buy homes in areas with beautiful landscape for longer stays.

The various components of Marina Al Qussor range from over 4,000 residential units with villas, townhouses and apartments located on the lakeside, beach, marina and quayside; six hotels ranging from three to five star as well as luxury boutiques located on the beach front and marina, leisure facilities with a marina, yacht club, beach clubs, spa resort and sports club.

Away from the Sousse area , the town of Gammarth in the northern suburbs of Tunis is the location for the most important investments project of the businessman Aziz Miled, where the ‘Gammarth Marina’ is taking shape. The infrastructure works are at an advanced stage.  The pattern of funding is also at a well supported pace.

Most recently the company in charge of the marina project’s realisation has decided to increase its share capital from 20 to 30 million dinars.

The project consists of a marina containing 400 to 500 berths conforming to international standards and can serve as a port of transit for vessels of all sizes. Inspired by the village of Sidi Bou Said, the project will be modern and innovative, with white residences sandwiched between the green hills of Gammarth and the blue waters of the Mediterranean sea.

Villas and duplexes placed around the harbour basin offer space and well-being.  Perched on the hills and buried in the vegetation, the apartments are ideally located in a pleasant and airy position.  Shops, cafés and restaurants are located throughout the development.  A maze of streets, pedestrian walkways lined with palm trees and forest paths criss-crossing the developments will be created for residents and visitors alike.  At the western boundary of the site, a sheltered beach has been set giving residents a space for relaxation and leisure

1st May 2008

In monetary terms, the money supply and the economy grew in March 2008 by 2.8% and 1.8%, respectively compared with the month of December 2007.  The money market has been characterised throughout the months of March and April 2008, with a surplus of cash, requiring the intervention of the Central Bank in order to ensure an optimal level of liquidity, while continuing the funding of the economy.  Interest rates have fluctuated on a daily basis in the money market between 5.13% and 5.38% since the beginning of this month.

As for the dinar’s evolution on the foreign exchange market since the beginning of the year and up until April 28^th, it registered a 4.4% appreciation vis-à-vis the U.S. dollar and a depreciation of 1.6% against the euro.

In light of the given data, and after a further examining of the global economic situation and its potential impacts on the Tunisian economy, the Board of Directors has decided to increase the rate of compulsory reserve on deposits, to more than the current 5% set previously by the TCB.  According to some experts the rise is likely to reach the 6 percentage points.

This latest decision involves, in addition to the excess liquidity noticed by the board of the TCB, a surge in inflation. So, in order not to raise interest rate and consequently burdening investment, the Tunisian Central Bank has opted for reducing the banks’ capacity to give loans by draining monetary resources serving as basis for credit distribution.  The limitation of credit, should help reduce inflationary tensions.

23rd April 2008

20th April 2008

During the course of a relaxed press conference held by Monsieur Eric Besson, French Secretary of State in charge of the Evaluation Perspectives of Public Policy Assessment and Digital Economy Development, in the presence of his Excellency Monsieur Serge de Gallaix, the Ambassador of France to Tunisia, the French official has declared that there is “No fear, the Mediterranean Union is a concrete project.”

Monsieur Besson said, that he was extremely impressed by the smooth organisation of the symposium and that he found certain interventions to be very interesting, especially on the level of the quality of the issues raised, “It is true that the word ‘partner’ dominates our relations but I have really appreciated the intervention of a bank manager highlighting the benefits resulting from the ‘competition’ between our two countries.” He added that he emerged from the debate very pleased with the frankness of the direct interventions which made him feel amongst friends.

Speaking of friends, Monsieur Besson touched on the subject of the Mediterranean Union, saying that he did not understand why the southern countries consider the outcome of the discussions, negotiations and compromises reached with European countries constituted a retreat from the project.  He reaffirmed, in a reassuring tone, that to the contrary, European partners are showing great interest to the proposed union which was initiated by the French President, Monsieur Nicolas Sarkozy and consider themselves part of it, approve of it, and that they will even contribute financially to its projects.

Responding to a question dealing with the Barcelona process, Mr. Besson said that "The Mediterranean Union is the business of all of us, maybe you perceive that the Barcelona process is not proceeding quickly enough, but this does not mean that nothing has pre-existed prior to the declaration , in fact countries of northern Europe do not want to limit the project and its financing to the countries bordering the Mediterranean. T he idea of the commitment of the European Commission to the Mediterranean Union was not envisaged at the beginning.”

Mr. Besson affirmed that the initiative is seen as "Good news, there has been a compromise between Mr. Sarkozy, Merkel and other partners to integrate the commission, which shows a sign of continuity, for the major concrete projects."

On the change in the naming of the ‘Mediterranean Union’ to ‘Unity for the Mediterranean,’ Monsieur Besson was asked “Does it not in itself represent a setback to the project?”

“Whatever the name was, what counts is what this union will bring to its members, in terms of the content, the concrete projects, the economic development, advanced partnerships, trade on all levels and frankly the ’logo’ is not decisive, what counts is the contribution” responded the French official.

Indeed, the proposed Mediterranean Union was followed with great interest by the southern countries ever since Monsieur Sarkozy’s presidential campaign and they believed in it.

On this point Monsieur Besson said “I understand that there is a sense of disappointment which is in my opinion, respectable, explainable, but unfounded.”

On this feeling of doubt, Monsieur Besson, said that in few months things will dissipate and that we will all go beyond the doubts on this issue if the Paris summit of July 13^th should succeed.  He added that there is no reason for it not to succeed and that he will prepare for its success by organising a working meeting with the ministers in charge of Strategic Prospective and Planning in Marseille on June 9^th, together with the Tunisian ministers who will also be a major contributors to this gathering by preparing a document which will be tabled, reflecting the relations between the countries bordering the Mediterranean and projecting the next 10 to 15 years of the union with the objective of reaching an agreement on the document for presentation to the French head of state in Paris on July 13^th 2008.

Taking a detour on his visit to Tangier in Morocco, Mr Besson noted that the Moroccan government has instantly declared itself ready for the project, but also insisted that the project must be concrete and that there will be job creation for Youth, "We do not want to celebrate a great hymn to the Mediterranean without it being translated into practical projects."

Mr. Besson has also spoken of a document which he intends to make public in a week, where he will present a forward-looking exercise about France in 2025.

"The most important thing is to show that Germany derives its growth from relations and partnerships with the former countries of the east, which makes these countries Germany’s industrial suppliers, the idea is to do exactly the same thing with France and the countries bordering the Mediterranean," reported the Secretary of State.

On the topic of the Union’s capital, Mr Besson explained that the question of the location is still on Mr. Sarkozy’s table and that he has not yet a clear idea as to where the seat of the Mediterranean Union will be.  However, according to several Tunisian and foreign sources, Tunisia would have already been chosen by the French President Nicolas Sarkozy to host the secretariat of the Mediterranean Union.

The same sources reported that the capital Tunis was chosen to host the headquarters of the secretariat, in appreciation of the continuous support of President Ben Ali to the Mediterranean Union project.

17th April 2008

The journey to the capital from the south will be shortened with the forthcoming opening of the motorway M’saken/Sfax.  At a cost of 430 million dinars, the motorway stretches 97.7 km.

The motorway network will expand three folds by 2030.  This expansion will be in the form of sections, M’saken/Sfax (97.7 km), Sfax/Gabes (151.2 km) and Gabes/Ras Jddir (Libyan border).  On the East/West side of the country, Oued Zarga/Bouselem (70 km) and in a later stage Beja/Jendouba eventually reaching the Algerian border.  Currently, the studies on the new sections are ready, notably for the southern part of the country, but no commencement date has yet been fixed.

According to a reliable source at the ministry of infrastructure, the M’sake/Sfax section of the motorway will be operational in June and will comprise six interchanges at M’saken, Borgine, Karkar, El Jem, and Hancha, Sfax North.  Tolls will be at the level of a main station located in M’saken and five secondary tolls on the level of the interchanges.  Specifications on the equipping of the toll stations are currently being developed.

The motorway which was realised by four different construction companies, will be equipped with 4 rest stations (two in each direction) at Borgine and El Jem.

15th April 2008

According to the website ‘ybw.com’ Avon Inflatables Limited has decided to close its manufacturing facility in Llanelli, Wales, in order to relocate its production to a new site in Tunisia.  The company’s plants in France and Spain will also be closed for the same purpose.

The company has equally declared that it will proceed with the closure of its plants any time, between now and December 2010.

Avon Inflatables Limited has produced more than 200,000 canoes and inflatable tyres (RIB).  Recognised as a pioneer and world leader, Avon has an enviable reputation for innovation, performance and quality of its exceptional products.

15th April 2008

According to the Oxford Business Group, the surge in oil and wheat prices on the world markets obliges Tunisia to reconsider its policies of support.  The soaring of prices on a global scale, will have an increasingly important impact on the Tunisian economy and threatens to sweep aside the government’s commitment to maintain the budget deficit. The country, nevertheless, seems ready to cope with all obstacles this year.

The General Compensation Fund in charge of the implementation of the government’s policy of support, has been, up until now, able to maintain its oil grants to 1% of GDP over the course of the year 2007, thanks to the two consecutive rises in fuel prices at the pumps, in May and in October.  Meanwhile, the continuous rise in prices have necessitated an additional package in December, which saw the total subsidies (including those for wheat and other raw materials) increase to the tune of 1.3% of GDP.

Tunisia which has ‘proven’ oil reserves of 700 million barrels, does not have a great margin for manoeuvre in terms of supply in response to the price increases of oil.  Given that the price rises of the oil barrel are in dollar, Tunisian oil becomes economically viable to exploit favouring production.  Consequently, causing energy export to rise to more than 50% in 2007, thus preventing the deficit from widening, reaching just 2.5% of GDP compared to 2% in 2006.  However there is a limit to the overall prices compensation through energy exports.  Considering that currently oil prices are refusing to drop below $100 a barrel, the government could well make an effort to maintain its fiscal deficit target of 3% of GDP, especially if one considers that its subsidy calculations are based on an average price per barrel of $75.  If the average price of oil were to exceed $100 per barrel, the subsidy of 400 million dinars provided by the government will then be far from sufficient, causing a delicate compromise between higher prices at the pumps and a more important budget deficit.

In anticipation of such eventuality, the Fund was rumoured to have provided for reassessment of its subsidy programme.  This should allow for an increase in agricultural production, in order to offset the rapidly rising costs of cereal imports.  For instance, subsidies for wheat are expected to be 800 million dinars this year and the Fund already accounts for an increase of around 60% of all food subsidies.  It is likely that a new policy will be announced soon, as a deterioration in the external position could well become a ‘dead weight’ slowing economic growth.

The International Monetary Fund (IMF) remains, nonetheless, satisfied since the government’s general monetary policy is expected to be able to head-off current pressures facing the economy.  Any unexpected slowdown in growth in 2008 will be caused by external rather than internal factors.  Inflation, in its biggest part imported, is constantly rising, reaching 5.3%, an increase of 2% compared to December 2007.  The Tunisian Central Bank has already responded by increasing the reserves requirement from 3.5% to 5% in November 2007 hoping for a liquidity recovery.  Interest rates remain relatively stable, with a monthly average contained in the range of 18 points for the past 12 months.

Such restrictive monetary measures stand a good chance of having the desired effect and maintain steady growth, nevertheless, the entire country remains vigilant to avoid any potential slowdown in the coming year.  The IMF has, however, revised downwards its growth forecast for 2008 from 6.3% in 2007 to 5.7%.  This is largely attributed to the increase in commodity prices and to the weaker international demand.  The IMF has added its own advice in the area of subsidies, recommending ‘alternative options’, different to the General Compensation Fund system in order to protect the purchasing power of low income families.

The IMF has not explicitly stated what such alternatives could include, however, it is certainly the case of introducing instruments to promote structural policies such as more restrained public expenditure to keep budget deficit within target and thus suppress inflationary pressures resulting from public sector expenditure.  By combining efforts in order to increase domestic production and substitute imports, Tunisia should be well placed to avoid the current global depression.

13th April 2008

The energy crises which have dominated the world’s economic agenda as a result of soaring prices and diminishing oil reserves, made foreign companies fall over each other in a mad rush to get their hands on previously unexploited, but potentially promising locations, in order to extract these precious resources from the depths of the earth.

This ‘black gold’ rush, has benefited many countries, including Tunisia, which has seen its energy investments substantially grow in recent years.  Investments in which the British have the lion’s share.  A trend that is going to be consolidate further with the granting of a new exploitation permit to ‘Cairn Energy Group‘.  Having already secured two exploration permits in Tunisia, which could reach 80 million US dollars in 2008, through its two subsidiaries Plectrum and Medoil, the group plans to strengthen its presence in the country through ‘Reap Tunisia’, also one of its subsidiaries, according to a communiqué released by the British Embassy.

The group will also obtain a new exploration licence for the Nabeul offshore deposits.  The cost of the new project is estimated to be at 20 million US dollars per well.

A signing ceremony for the new licence ‘Nabeul’ will be held, added the communiqué, Monday, April 14^th, 2008 at the headquarters of the Ministry of Industry, Energy and Small to Medium Size Enterprises, in the presence of Alan Goulty, the UK ambassador to Tunisia, Simon Thomson, Robert JE Jones and Ivo Augelli on behalf of the Group Cairn Energy.

Tunisia and Great Britain have signed a protocol of understanding in 2004 aiming at strengthening their cooperation in the field of energy.  It has been qualified as fruitful by the committee overseeing the cooperation progress.

12th April 2008

At the first ever forum on investment of the Agadir member states which was held in Brussels, Mr Afif Chelbi, minister of Industry, Energy and Small to Medium Size Enterprises has spoken of the tripling of trade with the European Union during the period 1995-2007.

The minister has revealed that the export figures of textile have doubled in the course of this period from 1.2 billion euros to 3 billion euros, while figures in the automobile component and aerospace sectors have exploded from 0.6 billion euros to 3.1 billion euros.  He then went on to say, that more than 2,500 European companies are currently operating in Tunisia compared to 1,200 in 1995.  He also confirmed Tunisia’s position as the number one industrial exporter South-Meda (south of the Mediterranean.)

The minister has underlined the importance of the Agadir Agreement by saying that ‘the agreement represents real advantage for the signatory countries and the European Union as it reinforces the integration process of the Euro-Mediterranean and provides opportunities for economic and industrial complementarity through the diagonal cumulation of origin.’

10th April 2008

9th April 2008

American and Canadian investments in Tunisia have experienced significant increase last year, according to the report published Monday April 7^th by the Agency for the Promotion of External Investments (FIPA-Tunisia.)

The report shows 176.35% and 42.6% growth in investment flows from the United States and Canada respectively.  Other countries, in spite of the lesser important volumes of their investments, have also shown strong progress in 2007, such as Portugal (125.2%) and Germany (101.3%).

In terms of overall ranking, France continues to be by far and away the biggest investor, followed by Italy and Germany respectively.

On another level, foreign investment flows oriented towards Tunisia in 2007 accounted for 19.1% of Tunisian productive investment, 4.8% of GDP, 45% of foreign capital and 24% of job creation.

9th April 2008

A construction agreement of a permanent headquarters for the World Health Organisation (WHO), in Tunis was signed Monday April 7^th.

The signing ceremony was attended by Mr Mondher Zenaidi, Minister of Public Health and Ms Najoua Miladi, Secretary of State in charge of hospitals.  The minister has welcomed the agreement, which coincides with the World Health Day celebrations and comes as a confirmation to the strength of the relationship between Tunisia and The World Health Organisation, opening up new prospects for expertise exchanges on both sides.

For his part, Mr Ibrahim Mohamed Abderrahim, the WHO Tunis office Director, said that the new headquarters will be built on an area of 1,700 squared meters at the El Khadhra site in Tunis.  The building which will have four floors, will cost around 3,150 million dinars to construct.  He also said that the building work will take 15 months to complete and that the new headquarters will host the WHO’s major regional activities.  The choice of Tunisia for this project, was the result of the prevailing stable and secure climate, as well as its excellent geographical position, he added.

8th April 2008

7th April 2008

The Governor of the Tunisian Central Bank (TCB), Mr Taoufik Baccar, has announced during a press conference, that the evolution of the banking sector is perceptible at three levels : the financing of the economy, the mobilisation of the savings and the indicators of financial strength.

Regarding the financing of the economy, the Governor said that the evolution rate of the outstanding assistance from the banking sector to the economy (loans and participations) rose to reach 9.8% compared to 7.1% in 2006. The deposits recorded an increase of 15% against 11% in 2006, reflecting the improvement in the ability of banks to mobilise savings, he added.

The increase in the pace of the deposits’ mobilisation and the financing of the economy, has contributed to the liquidity improvement in the sector compared to 2006, which was reflected positively on the soundness of the financial indicators of the banking sector, resulting in a fall in the rate of classified debts (vis-à-vis commitments) from 19.3% in 2006 to 17.3% in 2007, a considerable step towards meeting the target set at 15% by 2009. The debt’s coverage rate classified by savings has improved, reaching 54.5% in December 2007 compared to 48.5% during the same month in 2006. The objective is to increase this rate to 70% by 2009. The rate of debts classified net of provisions in relation to commitments fell by 10.9% to 8.7% in the course of the same period (the objective for 2009 is to reach 5%.)

These results can be explained, according to the Governor of the TCB, by the efforts deployed to control the risks and not by the transfer of those debts to debt recovery companies or their cancellation. It should be noted that the overall volume of transfers to debt recovery companies and/or cancellations of the debts has not exceeded the 130 million dinars, emphasising that these measures reflect new practices that are beginning to be adopted by the banking sector. Mr Baccar has added that the international rating agencies have agreed that the approach taken by Tunisia for the evaluation of classified debts, is in line with international standards. It is a ‘very cautious approach’ and a positive one for the overall risk evaluation. (Noting, that classified debts are those which have not been reimbursed for more than three months.)

The Governor of the TCB has also said that 5 banking institutions have already achieved the objectives of 2009 regarding the rate of classified debts and their coverage rate by the provisions, while 9 banks have realised the fixed objective rate of classified debts of not exceeding 15%. He added that improving the financial foundation of the banking industry, will permit for an optimistic outlook on the future, given that the improvement of the banking sector situation makes it more suited to accompany the country’s development process.

The Governor then referred to the measure relating to the reduction of excessive interest rates calculated on the basis of a 20% increase in the current average effective interest rate against 33%, which causes a decline in the excessive interest rates of around 1.25%. This important measure, he explained, involves all categories of loans including housing loans, overdrafts and others…Mr Baccar said that a bill has been prepared to amend the current law, it will be submitted to the government in the coming days. He argued that the third measure authorising the ‘Banque de l’Habitat’ to reduce interest rates on housing loans, while maintaining the rate unchanged whenever the repayment period of the loan surpasses the 15 years, happens thanks to the improvement of the bank’s financial indicators. This measure relates to the 3 categories of funds, the first concerns loans obtained from regular sources of the bank (not conditioned by savings), the interest rate of the equivalent credit, in this case, in the Money Market Rates (MMR) + 3% for a repayment period of 15 years. Interest rate was fixed at 8.5% for loans with repayment period varying between 15 years and 20 years.

The second category of loans granted under the system of housing savings, in turn relates to two types of credits in the first instance the regular appropriations where interest rate remained unchanged (6.75%) with an extension of the repayment period up to 25 years instead of 20 years and a second supplementary appropriations where interest rate was fixed at 7.5%, with a repayment period of up to 25 years instead of 20 years today.

The 3^rd category, deals with loans under the housing savings scheme (EL Jedid), the interest rate equals the MMR + 2% for the savings system of one year and where the repayment period is 10 years.

The interest rate was fixed at MMR + 2.5% for the savings system of two years, where the repayment period is 15 years, the rate is the same for the savings system of 3 years, while the 4 years savings system is fixed at 8% for a repayment period of 20years.

The governor of the central bank has also outlined the measures targeting customers of the banking sector, stating that they concern the creation of an index to track changes in the cost of banking services, noting the need for the banks to inform their customers in the case of the adoption of a variable interest rate, the impact of the increase in the MMR on the monthly payment (capital and interest.)

06th April 2008

The Tunisian economy has not recorded negative growth since 1986, showing great resilience to external shocks.  Over the past decade, GDP has increased by nearly 5% on average.  For the year 2007, growth was estimated at 6.3% compared to 5.5% in 2006.

For the year 2008, the budget was established on the basis of a forecast growth rate of 6.1%.  The principal engines of growth are Tunisian household consumption and exports.  Household consumption is still by and large driven by the dynamism of consumer credit.  Exports are stimulated by the important amounts of cash invested in the offshore sector.  However, the balance of the total investment is more nuanced, given the persistent weakness of private investment locally.

On the supply side, the electromechanical and plastic industries supported by foreign investment are experiencing rapid growth, the textile sector is enjoying a certain recovery after several years of recession.  In addition, the year 2007 was marked by an increase in oil production.

Economic growth has allowed for the considerable improvement in the incomes of the population : In 2007, GDP per capita was estimated to be at around 3,300$.  In terms of purchasing power parity, Tunisia is gradually converging to the income levels of developed countries.  This trend is accompanied by progress in terms of life expectancy, the place of women in society, health infrastructure and education.  A true ’middle class’ is progressively emerging in Tunisia.

Tunisia has recorded an economic growth of 5.8% over the period of one year.  The official figures published Friday March 28^th on the National Institute for Statistics’ website, also demonstrate an enhanced performance in the areas of transport and telecommunications.  According to the same source, the growth achieved exceeded government’s forecasts : 6.26% instead of 6.0%.  The Gross Domestic Product (GDP), stood at 6,074 billion dinars in the last three months of the year, compared to 5,739 billion dinars for the same period a year earlier. Services provided by the telecommunications and transport industries, grew by 16% during the same quarter, while manufacturing industry went up by 11%.  Sales from the textile sector abroad increased by 9.7% in the last three months of the year.  Food processing industries have also recorded an increase of 4.4%.

The Tunisian government is hoping for reinforcement of the private sector in the field of information technologies and in the service industry sector.  This strengthening should allow for the acceleration of the average annual growth rate to 6.3% in the next decade, which should help to reduce unemployment further.

06th April 2008

In terms of recreation, Bizerte now plays a major role along side the other great metropolises of the Mediterranean.  This great city of the north will soon have a marina of 1,000 berths. This marina will be of the same size as those erected on the northern shores of the Mediterranean.

Baptised ‘Cap 3000’, the project, whose realisation will take approximately two years, will mobilise investments in the order of 160.8 million Tunisian dinars.  The work which will be undertaken consists of enlarging the basin of the old port, strengthening the linking-up capacity to reach one thousand berths and give a facelift to the neighbouring areas of the old port and Medina.  In addition, a seven floor luxury hotel as well as an oceanographic museum will be created.  The marina represents a component of a strategy aiming at developing, all along the country’s coast line, recreational and cruising activities.

Two factors in favour of this development : Firstly, there is big demand for this type of project, the overbooking facing marinas in the northern basin of the Mediterranean makes the venture all the more attractive.  Pleasure boats are forced to wait for weeks and months for a berth.  Secondly, there is the expansion which the shipping industry is experiencing, particularly the construction of pleasure boats.  With high levels of purchasing power, yachtsmen and sailors are increasingly inclined to buy their yachts and sailboats, synonyms of escape and freedom.  Add to this the availability of quality hotel infrastructure and archaeological heritage within the area.

A market study prepared for this purpose, in collaboration with the ’Societe de Services et de Conseil en Environnement Marin et Oceanographique‘, ’Creoceon’, the Port Authority of Marseilles and the ’Societe Tunisienne' Somete (engineering building and civil engineering), shows great interest in exploring and exploiting this profitable niche in Tunisia.  This should enhance Tunisia’s 1,300 km of coast line, diversify the tourism product, reinforce the country’s share in this lucrative market and attract high-end clientele reputed to be exceptionally high spenders.

The economic stakes of this activity are enormous.  The study shows that 16 million dinars per annum of revenue could be gained through an increase in turnover of Tunisian marinas, services generated by this activity as well as local and foreign expenditure.  As for the overall financial impact, the study estimates that 200 million dinars could be generated by leasing, real estate acquisitions, management of ports and nautical services.  On the social front, the number of jobs that the marina project could generate is estimated to be around 15,000 over ten years.

05th April 2008

Following the mission conducted by its delegation in Tunisia, Standard & Poor’s confirmed the notes, BBB/A-3 in foreign currency and A/A-1 in local currency, attributed to the Republic of Tunisia.  The outlook is qualified as ‘stable’.  The notes assigned to Tunisia reflect the authorities' commitment to pursue a prudent macroeconomic policy and to continue their efforts for structural reforms.

These reforms have helped supporting an average annual growth rate of per capita GDP of more than 4% over the last decade, they have also helped to maintain a moderate primary deficit of less than 1% of GDP.  This performance has contributed to the steady and regular decline in government debt, estimated at 49% of GDP by the end of 2008, compared to 56% in 2005.

05th April 2008

Thanks to a sustained pace of economic growth, Tunisia has made remarkable progress in terms of its Association Agreement with the European Union (EU), emphasises an EU report.  The report adds, that progress has been made in areas targeted by the plan of action adopted by the two parties in July 2005.

First country south of the Mediterranean to sign such an agreement with the European Union in 1998, Tunisia remains an active partner and quick to carry out the reforms required in order to benefit from the shared advantages of the agreement, added the report.  Tunisia is notably the partner most advanced in the context of implementing the European Union’s Agreement of Association.  Mrs Benita Ferrero-Walder, member of the commission, responsible for External Relations and European Policies for Neighbouring Countries, has confirmed this by describing the relationship as ‘successful’.  She added “We are working hand in hand with Tunisia and other partners to help them carry out structural reforms in order to establish closer ties with the EU.”

In fact, the year 2007 has witnessed an impetus in the Tunisia-EU dialogue.  An institutional dialogue which is activated by the various working groups established by the Association Agreement, opening prospects for negotiations in the socio-economic domains.  The EU has therefore embarked on a process of supporting the reforms undertaken in several areas including education, health, employment and poverty alleviation.

In the field of education, the EU contributes to the training of teachers and to the development of training centres.  In the employment area, the EU has provided assistance to 10% of Tunisian enterprises to help them get in line with European standards in terms of innovation, competitiveness and quality.  In health, the EU supports the reform of the health insurance system which should expand to cover the entire population, including the poorest.  The EU also supports the upgrading of the public health sector which aims at improving the benefits, qualitatively and quantitatively.  Rural development is another important area to which the EU provides assistance, notably on the level of natural resources protection and the fight against poverty.

In terms of financial cooperation, the aid granted by the EU in 2007 in order to achieve ‘priority goals’ as defined by the action plan, amounts to 103 million euros out of a sum totalling 300 million euros programmed for the period 2007-2010.  The achieved results will pave the way towards the establishment of the free trade zone Euro-Mediterranean by 2010, the ultimate objective of the Association Agreement.  An objective that will be gradually introduced and which has already seen the realisation of two significant milestones.  First of all, there is the dismantling of trade tariffs, engaged since early 1996. Then the integration in the free trade Euro-Mediterranean zone which has come to force on January 1^st 2008 resulting in manufactured products imported from Europe being exempted from customs duties.

02 April 2008

Recent indictors related to inflation in Tunisia do not appear to be flattering !! The rise in the general price index is no longer just a tale of statistics, inflation is being felt on a daily basis by the ordinary man on the street. The question is to what extent a country like Tunisia can control and contain this phenomenon of sustained ‘imported’ price increases which are not due to internal inflationary pressures. These threatening inflationary pressures are the result of an unfavourable, if not chaotic, international economic environment and this is for various reasons.

Behind the correlation, now largely proven, implicating the rising prices of natural resources following the successive falls of the dollar against other currencies, there is the never ending ‘subprime’ crisis undermining the United States’ and other major credit markets.  Indeed, analysts expect losses of around 600 billion dollars, of which only about 180 were traced so far. This means that the crisis is only at its beginning, it is even not half way and the damage is already being felt around the world. The American Federal Reserve has accordingly injected 800 billion dollars to support troubled institutions and prevent liquidity risk from materialising. This action, together with the successive falls in the dollar rate, brought to 2.25%, designed to facilitate the repayment of loans indexed contracted by American households, has eventually ended up in sending the green note into the abyss, with dire consequences to the rest of the world.  Effected, notably, by a quasi-proportional increase in the prices of natural resources.  A shock that will unfortunately hit the Tunisian economy.

The prices of natural resources adjusted by the United States inflation, currently at around 7.4% over the year according to the latest statistics released in January, have yet to reach their maximum levels in times of crisis, as seen in the early eighties for example.  Indeed, gold is expected to reach the 2200$ per ounce at constant prices.  The ounce currently stands at only 875$.

Sugar is at 1179$ and could reach 5895$ at constant prices, the crisis of ‘savings and loans’ observed in the US during the early eighties, has resulted in several institutions declaring loans bankruptcy.

Although wheat is only 10$ the bushel, it could well reach 48$ at constant prices.  Corn still at 5.07$, could increase by 600% to reach 34$ the bushel.  Steel could in turn go up by almost 400%. The main lesson that emerges, is that natural resources are likely to evolve at rates ranging between 200% and 600% before reaching their peak in the crisis phase !  Past natural resources price booms observation has shown that they tend to have evolving cycles of between 11 years and 21 years, theoretically implying a conclusion which is not very pretty, stipulating that the current crisis is only at its infancy and that the worst is yet to come.

Despite the economic slowdown of the American economy, there is no evidence that there will be a fall in demand on natural resources.  Demand for wheat, oil, copper and other precious metals remains at record highs in the absence of adequate supply.  Supply is even not close, to be able to restore some certain equilibrium situation.

Across the globe, supply is undergoing constraints of different orders, such as disinvestment in infrastructure or interruptions due to terrorism and other geo-political tensions. The ‘subprime’ credit crisis, is not over yet, just as the rising prices of the world’s natural resources.

Tunisia must therefore, learn to live with this new unfavourable world economic situation, inflation has already risen without being able to do much to prevent it.  It is true that there has been an increase in the director rate of the Tunisian dinar, as well as the recent raising of the obligatory reserves imposed on banks.  The aim being the curbing of local consumption, however, evil comes from elsewhere and it is alas, uncontrollable.

02nd April 2008

The Governor of the Tunisian Central Bank, Mr Taoufik Baccar, has recently presided at the TCB’s headquarters over a meeting aimed at assessing results of the mission conducted by the Japanese rating agency R&I (Rating and Investment Information inc.)  During the course of its visit, the R&I’s delegation met-up with the ministers for the International Cooperation and Development, finance, Tourism and Employment.  This evaluation meeting helped to highlight the results achieved by Tunisia in terms of economic development, notably the progress that has been accomplished in the financial and banking sectors’ reform.

The meeting, has equally focused on the latest developments in the international economic environment and on the Tunisian economic outlook for 2008.

In this regard, Mr Baccar emphasised Tunisia’s efforts to cope with the shocks in the world economy and maintain a rapid pace of growth, allowing, amongst other things, for the enhancement of employment prospects.

On its part, the R&I delegation, has saluted the positive and progressive march of the reforms undertaken by Tunisia and decided to improve the country’s credit rating of the sovereign risk for its bond issues in foreign currency from “A-” to” A”

It must be noted that the R&I’s visit comes as part of Tunisia’s rating follow-up.  Indeed, in addition to the R&I, there were the recent visits of the agency “Standard and Poor’s” and the “International Monetary Fund” mission (end of 2007) which were crowned by positive reports- published, respectively on the IMF’s and the TCB’s websites highlighting Tunisia’s economic performances which were picked on by several media groups.

23rd March 2008

Yazaki, a Japanese company specialising in cable manufacturing, has just been given the final agreement for the creation of its new factory in El Kef, north west of Tunisia. The company is expected to create 1,800 jobs by the end of 2009.

El Kef has become a very attractive site for the implantation of industrial companies specialising in the motorcar spare parts.  Numerous promoters as well as other big foreign enterprises have already expressed their desire to establish factories in the area.

The German company Somitu is also showing interest in the site. The company wishes to build a factory in El Kef which could generate a further 1,000 jobs. The agreement is believed to be imminent, thanks to the favourable business and investment climate that currently prevails in this region where basic infrastructure is considerably developed.  Koroplast, another German company engaged in the same line of business, is also showing interest in the El Kef site. Talks are at an advanced stage and it is hoped that they will be concluded shortly.

Worth mentioning that roughly, 40 other diverse projects have been adopted by the banks and their realisation should have a positive impact on the job market. These projects mobilise will 48 million euros and will allow for the creation of 880 direct jobs.

At this pace, unemployment will be significantly reduced, thanks to the creation of almost 3,000 jobs every year, against an additional demand of 1,300 forecasted for the next three years.  This augurs a new era for the industrial sector in this traditionally agricultural region which could quickly join the fold of the major industrial metropolises, provided that all of these projects take root!

15th March 2008

In 2007, world tourism accounted for 900 million tourists. Tourism represents more than 8% of the world’s GDP and employs some 200 million people. The data emphasises the importance of the sector to the global economy as a whole.  However, the current economic climate raises doubts about the industry’s immediate future.

Several facts suggest the emergence of an international economic ’crisis’.  On the one hand, at $1.5625, the euro has reached its highest level against the dollar since its inception. The green note has also fallen below 100 yen for the first time since 1995.  Add to this, the price of one barrel of crude oil has again broken its own record, closing at $111.  An ounce of gold had reached $1,000.  On the other hand, and according to the second estimation of the European Office for Statistics (Eurostat), reported on March 14^th 2008, the rate of inflation in the euro zone currently stands at 3.3% compared to the 3.2% initially announced, reaching its highest level in ten years.

While these problems may well contribute to a decline in European living standards, it will be perfectly possible, however, that this phenomenon will have some knock-on effects on Tunisia.

Tunisian professionals in the tourism sector, hoteliers, caterers and travel agents are all major job creators.  In addition, other related activities such as the construction industry, retail trade, handicrafts, etc…. are all contributing areas which are currently in full development.

With regard to the new tourism trends, notably medical tourism, Tunisia has managed to claim the second place globally in Thalassotherapy after France, with 25 centres frequented by 200,000 tourists a year.  The hotel Abou Nawas in Sousse, was the founder of the first Thalassotherapy centre in Tunisia.  Several other centres have emerged since then.

Cosmetic surgery has also contributed to the sector’s development.  Europe’s first destination for cosmetic surgery, Tunisia is attracting more and more medical tourists, who come for treatment combined with a pleasant holiday.  Whether they were French, Belgians, Italians, Germans, British or Swiss, European tourists are attracted to high quality medical services and prices that are two to three times cheaper than those in Europe including the stay at the hotel and the time at the clinic.

One might ask why such services are two to three times cheaper than in Europe?

• The cost of living is a lot cheaper in Tunisia and salaries are much lower than those in Europe.
• The euro is worth nearly two dinars (1.8 TD).
• The granting of tax incentives to the medical tourism by the government to encourage growth in the sector.

Returning to the point of the ever growing pessimism surrounding the global economic outlook and how European inflation might impact on the Tunisian economy : As already explained, tourism constitutes an important lever in the country’s economy and Europe is Tunisia’s number one client in this domain.  The upwards inflation revision, accompanied by sharp rises in oil prices and increases in housing, food products, transport, etc… costs will undoubtedly contribute to the decline of European living standards, which will could lead to a drop in the number of Europeans visiting the country.  The question is, how could Tunisia react in face of this phenomenon?

Tunisia could adjust its prices perhaps.  At this level, however, price adjustment is not the right solution since Tunisia already enjoys an advantage in terms of tourism competitiveness over its main rivals, namely Turkey, Egypt and Morocco respectively ranked 54^th, 66^th and 67^th as compared to Tunisia who is ranked 34^th globally according to the world economic forum. Perhaps more importantly, Tunisia is ranked 10^th world wide in terms of price competitiveness.  So revising prices downwards is not an issue.

However, Tunisia could perhaps, concentrate its efforts on other sectors within the industry or directly linked to it which already exist, but have never been developed enough.  There is talk of socio-cultural tourism, a niche eminently yielding, which will allow its followers to discover new cultures through exchanges, apprenticeships and detente programmes.  These new sectors could attract new bread of tourists from Europe and other far away continents.  One could think of the Chinese considered as ‘spenders.'  According to the French magazine Le Figaro, Chinese tourists have managed to spend 590 billion dollars in 2008.  Chinese tend to travel more to destinations where ‘bio’ culture is well developed, this niche is constantly developing in Tunisia.  The reputation of the Tunisian olive oil remains incontestable.

The realisation of seminars and conferences on the subject, the encouragement of the state to young college graduates and farmers for the development of this activity reflects the new biological aspect of Tunisia.  By continuing along this path, there will undoubtedly be rosy economic prospects for the future.

13th March2008

According to the statistics provided by the Agency for the Promotion of Foreign Investment (APFI), 91 new French projects were created and a further 83 were extended in 2007. This has allowed for the creation of some 5,000 direct jobs. Over three quarters or (75%), of these projects relate to the manufacturing industry, followed by the energy sector (17%), services (4%), tourism (2%) and agriculture (1.5%).

Given the maintained steady pace of the French presence of development in the manufacturing industry in recent years, the API (Agency for the Promotion of Industry) identified 1,180 implantations resulting in the creation of 106,000 jobs by the end of 2007.

Italy figures in second place in the ranking with 653 implantations and approximately 53,000 jobs, followed by Germany (256 implantations and 34,500 jobs). For both of these countries, the manufacturing industry is also largely dominant.

This leaves the mega projects proliferating in Tunisia by foreign investors. According to different sources, they are expected to total 65 billion dinars and spread over the next ten years, at least. These projects which will be entirely financed by private equity investors, should contribute to the creation of no less than 950,000 jobs. Financial and economic sources believe that these projects will help reduce the rate of unemployment by 4 percentage points.

13th March 2008

Even the largely watered down version of the Mediterranean Union project designed to defeat German hostility, risks taking a knock from other reticent member states of the European Union.

After a lengthy diplomatic tug-of-war, the French President had to reconsider his position and revise his ambitions downwards in order to obtain the support of the German Chancellor Angela Merkel, by accepting that other European countries non-bordering the Mediterranean are to be fully involved in the initiative.

According to the French-German text of the proposal which President Sarkozy and Chancellor Merkel will present to their European counterparts, the original idea is henceforth, largely downgraded to give ’new impetus’ to the Barcelona process, launched by the EU in 1995 to establish a partnership with its south of the Mediterranean neighbours.  Also, renaming what is currently known as  the ‘Barcelona Process’ or ‘Euromed’, little identifiable by the citizens of the Mediterranean by the ‘Mediterranean Union’. However, even the new name of the project, ironically called ‘Club Med’ by some critics, may not be acceptable unanimously. The name changing is yet to be settled, as noted by a high ranking European diplomat.

The Mediterranean Union has in the mean time received the full support of the European Commission. “We fully support the project, we have said from the beginning that it was a very good idea to move more towards the Mediterranean (….) At the same time, it is important that all European member states are involved and now it seems that all conditions are in place to move forward”, declared the President of the Commission Jose Manuel Barroso.  While the Franco-German document, barely two pages, proposes the creation of a co-presidency provided by a non-EU member and an EU member bordering the Mediterranean, some other countries, on the other hand, are wary of structure duplications.

“We do not need the duplication of jobs and/or institutions which will compete with the European Union”, reiterated the Slovenian Foreign Minister, Janez Lenarcic, whose country currently presides over the EU.

“Great Britain is satisfied with the Euromed, we are ready to strengthen its structures”, added the British Foreign Secretary David Miliband to the French daily newspaper La Tribune.

Another potential bone of contention is the sensitive question of the use of European funds, which requires unanimity among the 27 member states. “We believe that the expenditure programmes for the Mediterranean are already established and we do not support a significant redirection of funds” emphasised the British official.

The most fervent supporters of Turkey could equally make their voices heard against a project perceived since its launch as a way of imposing an alternative to Turkey’s entrance to the EU, to which Nicolas Sarkozy has always been opposed.

France, previously supported by Spain and Italy, hopes despite everything, to convince its European partners that this union, which focuses on concrete projects, such as cleaning up 130 polluted sites around the Mediterranean or improving the access to safe drinking water, will be more effective than the current European policies.

12th March 2008

At the end of his stay in Tunisia and before departing for Morocco, Shaun Donnelly, deputy representative of the United States for the external trade with Europe and the Middle East, gave a press conference at the United States Embassy’s headquarters in Tunis, where he expressed confidence regarding the future of relations between the two countries, given the potential that remains unexploited. The current volume of trade between the two countries is "not satisfactory." The U.S. official called to seize the opportunity of investment to ensure that the potentials are utilized properly. Currently, 70 American companies are present in Tunisia. They employ 18,000 people, with a total investment of between 700 and 750 million dollars.

Tunisia already benefits from the generalised preferential system set up by the United States. In fact, Tunisia is ranked 17^th beneficiary. Some 5,000 Tunisian products are eligible to be exported to the U.S. Referring to his Tunisia visit, the American official told the press that he has held excellent talks with members of the Tunisian government, in occurrence Mohamed Ghannouchi, the prime minister, Ridha Touiti, minister of trade and craft and Nouri Jouini, minister for economic development. “This visit has enabled us to make good progress. We have tried to identify the areas on which we will work. But, the negotiations will only be initiated once the ground is marked by both sides.”

10th March 2008

The announced January 2008 figures by the National Institute for Statistics, show that the price index for household consumption has risen by 5.7% during the past twelve months.  This growth rate is significantly superior to that recorded in 2007 which was only 2.5%.  It is even higher than the 2006 rate of 4.4%.  This significant shift in prices is explained by the widespread increases, touching food +9%, transport +4.7%, leisure +4.1%, housing +3.9%, maintenance and hygiene products +2% and clothing +3.1%.

The Tunisian citizen directly felt these increases in bread, pasta, dairy products, petrol and building materials.  The prices of these groups have already undergone a revision last year. This is from the official statistics point of view.  As to the ’unofficial’ sources, they argue that there has been a rise of 15% in the household price index. They base their evaluations on the fact that the National Institute for Statistics’ methods of calculation would have been very prudent.  According to these sources, several consistent increases would have touched basic items such as fruits and vegetables, cakes, white meat, fish, eggs, detergent, etc….’The prices of the mentioned items, have no competition on the parallel market, they have, completely shot up.  Their growth rate fluctuated between 20% and 50% in the period between January 2007 and January 2008.  Prices of fruits and vegetables have experienced an increase of more than 30%.

Such increases have effected the ordinary citizen’s purchasing power.  In particular, those with fixed incomes which are not subject to market fluctuations, essentially, salaried employees and pensioners.  Indeed, according to the experts : “The solution can only come from a monetary policy that controls inflation.  Experts say that energy prices cannot effect growth.  It can only intervene by around 10% in the production cost.  It will not be the cause of an overall imbalance, not in Tunisia’s case at least.  Thus it is a case of juggling fluctuations in the energy cost, especially since the energy trade balance for 2007 managed a surplus of 136.9 million dinars (3.138,5 million dinars of exports, against 3.001,6 million dinars of imports.)

One must certainly take account of foreign currency outflow in respect of the remuneration of foreign capital in Tunisia, in particular in the oil industry sector, which amounted to 740 million euros or 1.3 billion dinars.  This, however, is a fact which is part and parcel of the economic situation in general and not the result of some cyclical effect.  Thus, it does not enter the calculations of the energy balance and as such another solution must be found elsewhere.  The answer lies in maintaining growth and better exploitation of the compensation fund’s resources.  Nevertheless, it is the case of government charges that should be reduced.”

09 March 2008

Little Sicily, La Goulette

While the renovation project on the La Goulette’s old neighbourhood Little Sicily is nearing completion, major works have begun, for some time, only few hundred metres away, in the southern part of the town’s port, on a tourist village designed to accommodate cruise ships in the immediate vicinity of the Bac’s TGM railway station linking Tunis, La Goulette and La Marsa.

Followed with interest by the locals, the project is expected to be devoted to ameliorate the town’s tourist infrastructure by giving it a beautiful medina to welcome cruising tourists, in line with the spectacular growth that this destination has been experiencing in recent years, in terms of cruise tourism.

Indeed, according to the information made available by the promoter, ‘La Goulette Shipping Cruise’, this future tourist village covers 6,500 square metres capable of accommodating 3,000 guests at any given time.

The project will allow for the creation of new jobs and should contribute, in particular to the enhancement of the Bacs’ urban zone, which has remained unexploited, so to speak, with several places of abandoned bare land.

 Judging by the project’s models shown on site, the village for accommodating La Goulette’s cruising tourists and which will be intimately integrated with all other port constructions, will not fail in transforming the urban landscape of the area by significantly improving its aesthetic appeal. Especially since all of its neighbours, on the same side of the motorway between La Goulette and Tunis are currently witnessing huge renovation programmes in general, as part of the bridge construction project linking Rades and La Goulette whose entry into service is scheduled for next summer, probably in August 2008. The bridge is an important portion of the metropolitan ringroad crossing the Tunis Lake Canal and linking the southern and northern areas of the Greater Tunis region to connect Rades on the northern side and La Goulette on the southern side.

The village that will be built to accommodate the cruising tourists should resemble the medina in Hammamet Yasmine, in order to meet its function, presenting on the spot live models of the diverse and rich heritage that characterise Tunisia to its hosts. A complementary discovery tour will continue to figure on the menu for those who wish, but it will be in an organised framework and better conditions than those currently exist.

The project can thus, rightly be seen as a work of upgrading the triple urban plan, socially and economically, and reinforces the renovation action undertaken throughout the other neighbouring projects, relating to the rehabilitation of the Little Sicily’s old neighbourhood which helped resettle former residents in modern apartments located in a zone of prime quality at El Kram and develop the site with an open and valuable outlook on the future.

9th March 2008

7th March 2008

Despite a deceleration of more than 8 points in export growth, Tunisia’s external trade began the year 2008 with an 8 points gain in the coverage rate and a decrease in the pace of imports of more than 50%, compared to January of last year.

Exports have reported more than 19409 MD in 2007, an increase of 24.8% compared to 2006. One might be tempted to explain this increase uniquely and simply by the devaluation of the dinar vis-à-vis the euro of Europe, a trading partner which accounts for 79.3% of Tunisia’s exports. However, this would almost be misleading, since Tunisian exports have also increased in quantity. From 12.4 million tonnes in 2006, the volume of Tunisia’s exports to Europe have risen by 14.6%.  It remains, nonetheless, true that between the financial envelope and the quantity of exports, the rate of increase is somewhat different. Thus, the 24.8% rise of exports in 2007, is certainly influenced by the euro effect.

Using Tunisia’s external trade figures for 2007, one can make even more observations. Firstly, the two-tier system characterising the export activity, between enterprises operating under the on-shore general regime and those operating entirely for export or off-shore. Furthermore, there is this difference of size, in terms of export volumes, between on-shore and off-shore. Of the 19409.6 MD, the financial volume of Tunisian exports of almost 11794MD were realised by wholly exporting companies (off-shore companies.)  While the on-shore companies were 8716MD in deficit and could only manage a coverage rate of merely 45.5%. Off-shore companies trade balance, for the same year, achieved a ’gain’ of more than 3686MD with a coverage rate of 145.5%.  At first glance, exclusively exporting companies seem to have imported less and exported more.  Small compensation, exports of on-shore (+29.1%) have progressed better than those of totally exporting companies (+22.1%).  It is certainly true that some of these off-shores are owned by Tunisians.  What proportion do they represent ? Official figures do not tell.  Tunisian exports, thus, remain dependent on foreign wholly exporting companies implantation within the country, hence Direct Foreign Investment !

In addition to the effects of exchange rate in the rise of exports, one must note that Tunisia is the world’s third largest exporter of olive oil after Spain and Italy, the world’s first exporter of dates, 5^th supplier of Europe in ready-to-wear and 6^th in footwear.  In 2007, the largest exports were those of crude oil reaching 2632MD, Jeans trousers 811.2MD, olive oil 696MD, footwear 505.5MD, car parts 337.3MD and dates 68.9MD.  What is certain, however, is that Tunisia does not export just that.  It exports agricultural products, industrial and other products.  It so happens, however, according to more than one professional, and in particular amongst companies trading internationally, that on more than one occasion, they were unable to honour their commitments.  According to the same sources, other problems arise on the levels of production and export for a number of products outside the production conventionally exportable, limiting them to the relic of national consumption, in certain cases such in milk and tomatoes, the trade ministry may even declare an embargo and prohibit producers to export, under the obligation of the necessity to build up strategic reserves for local consumption.  For export professionals, it is high time to think of introducing the notion of ’production dedicated for export’, in the form of contracts between producers and exporters.  As noted by Companies of International Trade (CIT), those producers having the desire to export must have the confidence in CIT to carry out the task on their behalf and not try to compete with them and do it themselves.

7th March 2008

The Governor of the Tunisian Central Bank (TCB) Mr Taoufik Baccar and the Italian Ambassador, Mr Antonio D’andria, have inaugurated Thursday March 6^th the new bureau of the Italian Bank, Banca Agrileasing in Tunis. Banca Agrileasing is a subsidiary of the banking group ‘Cooperative Credit’ and one of the largest leasing companies in Italy, this new institution’s mission is to collect information on the Mediterranean markets, and identify the best ways of supporting the internationalisation process of Italian Small to Medium Enterprises (SME).

It should be noted that, in addition to SME, Banca Agrileasing also targets families and operates at several levels of banking activities offering highly varied services, ranging from ordinary financing to factoring.  Its President Mr Giulio Magagni, describes it as a young enterprise, creative and innovative that is constantly evolving and improving the services it offers its customers.

Mr Baccar has stressed that “it is in a context characterised by an important economic and financial dynamics that Banca Agrileasing has to evolve, I am convinced that it will give new impetus to the Tuniso-Italian relations and should bring closer the business communities of both countries.“  He added, “it comes at a time of major restructuring of the Tunisian banking system, based on the reforms of the juridical framework, the diversification of banking products and the strengthening of the banks’ base capital.” Ms Mariella Liverani, Director of the Agrileasing-Tunisia office, told the media, that “the opening of this office constitutes the first step on the road of greater presence of the Italian Cooperative Credit in the Mediterranean zone.“  She also added,“Tunisia, a country geographically and culturally close to Italy, will play the ‘natural hub’ role (or a relay market at the point of access) in order to conquer the North African countries, such as Libya, Algeria and Egypt.”

6th March 2008

The Mediterranean Union project, bone of contention in recent months between Paris and Berlin, seems less and less ‘caressed’ than that proposed by President Nicolas Sarkozy only few weeks ago. During his meeting with the German Chancellor, Angela Merkel in Hanover, President Sarkozy had to give up what constituted the originality of the Mediterranean Union cooperation which was born in the fertile mind of his Eurosceptic advisor Henri Guaino.

The ‘compromise’ to which France and Germany have finally agreed and yet to be the subject of a ‘joint proposal’ for the European summit of twenty seven next Thursday in Brussels, the Mediterranean Union will not ‘exclude anyone’ as stated by Nicolas Sarkozy in Hanover. “We have agreed, that this will be a European Union project” said Merkel, “we have found a compromise around the Mediterranean Union issue that we both want and which will not exclude anyone” added the German Chancellor. Therefore there is no question of limiting cooperation to countries on the Mediterranean shores alone, other European countries will be associated, beginning with Germany which will be in the heart of the project when its launched.

The Chancellor’s entourage stressed that the new initiative is no longer inscribed in the exclusion logic : According to Berlin, all EU countries should have the same status and the same degree of commitment potentials. The German capital’s interpretation of the Mediterranean Union is one of ’revitalisation’ of the Barcelona European process. The access or the lack of it to European funds is not yet settled, according to the department for foreign affairs. But a spokesman said, that funding could only be authorised on the basis of “decisions taken by the council on the proposition of the commission."  A way of functioning which is very different to the initial scenario that President Sarkozy wanted whereby the money is raised from outside the Union.

4th March 2008

Jacques Vallin, Director of Emeritus Research at the French NIDS (National Institute of Demographic Studies) is a keen observer of the Tunisian demographic evolution. According to him, the current challenges facing Tunisia are two folds : to ensure full employment and to invest a good portion of today’s dividends to face up to tomorrow’s aging population’s costs. His analysis are highly enlightening and call for swift action. It shows in filigree, the golden demographic age that Tunisia is currently living risks in time, being turned against it, if it does not act and prepare the