Global Arab Network | Tunisia keen to explore new partnership options with the UK

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Tunisia keen to explore new partnership options with the UK

Global Arab Network - David Morgan

Thursday, 22 September 2011 16:54

http://www.english.globalarabnetwork.com/images/stories/2010/Dec/tunisia_airport.jpg

Global Arab Network - The message from the new Tunisia to British business is clear and unambiguous: the country is once again open for business and keen to explore new areas of partnership , Global Arab Network reports.

H E Mr Hatem Atallah, the Ambassador of Tunisia, delivered this positive message when he addressed an ambassadorial roundtable at the Arab-British Chamber of Commerce on 20 September.

The business gathering, chaired by Baroness Symons, A-BCC Chairman and opened by Dr Afnan Al-Shuaiby, the Chamber’s Secretary General & CEO, heard the ambassador outline his country’s plans for development and reconstruction in the wake of its “Jasmin Revolution”.

The event provided an opportunity for the new ambassador to meet executives from some key British businesses and potential investors and brief them about the plans of the interim government in Tunisia.

The potential for increasing cooperation between Britain and Tunisia is considerable.

BG Tunisia is the country’s largest single foreign investor with an investment of $3.5bn in the energy sector and produces around 60% of Tunisia’s gas needs. The company is planning to invest a further $300 million in the sector this year and, with smaller operators launching new prospecting operations, the upstream potential of the country’s oil and gas sector looks promising.

UK companies have long been active in a diverse range of sectors in the country including manufacturing, electronics, tourism, transport, insurance and textiles.

Tunisia has opened the door to small and medium sized firms to invest in mechanics, electronics and food production as it seeks greater economic diversification to reduce dependence on tourism and boost its range of exports.

Tourism, which employs some 8% of the country’s workforce, accounted for about 12% of GDP in 2010. The sector was severely disrupted by the revolution, but it is now on a path of recovery with the government actively seeking to win back visitors and determined to improve tourism facilities.

Dr Afnan Al-Shuaiby told the meeting at the A-BCC that Tunisia was successfully meeting the challenges following events of earlier in the year and was now offering new opportunities to investors.

The ambassador visited the Chamber to explore potential avenues for new investment with potential business partners interested in Tunisia and he was accompanied by Mr Wahid Ben Younes, Tunisian Embassy, Mr Beligh Ben Soltane, FIPA and Mr Moncef Battikh, Tunisian National Tourist Office.

Introducing the discussion, Baroness Symons stated that Tunisia was a market that the UK had tended to overlook; but it had significant potential and she urged UK firms to exert themselves to develop business contacts with the country.

Briefing the delegates, the ambassador admitted that the economy had shown “severe strains” in the immediate aftermath of what he described as its “Jasmin Revolution”: it had suffered losses estimated at $7 billion, along with a 50% drop in tourism while unemployment had climbed from 350,000 to a current figure of 700,000.

But while the situation had been unstable and uncertain a few months ago, Tunisia had succeeded in managing its economy with its international partners and this was now beginning to show positive results, he said.

The ambassador outlined the discussions which had led to the unveiling of a detailed economic recovery plan which Tunisia had presented to the recent G8 meeting in Marseilles.

He stressed that Tunisia viewed partnership as the key to its future development and successful transition.

The aim of the “Economic and Social Development Plan” or “Jasmin Plan” was to create the conditions to generate prosperity and consolidate the nascent democratic structures.

The plan comes as the country prepares to move forward with elections for a Constituent Assembly on 23 October which will then draw up a new constitution for the country in this transitional period.

H E Mr Hatem Atallah said that “one of the fundamental demands of the revolution was the improvement of economic living conditions” and the interim government had adopted several measures to address immediate demands of the people, particularly for job creation.

He explained that the short-term emergency measures include job-support initiatives, the provision of enhanced financial support for social and regional development and assistance to enterprises that were adversely affected by the recent social disturbances.

The interim administration has also conducted a “complete overhaul” of the country’s regulatory framework relating to microfinance and private equity and was seeking to promote small businesses in rural areas through the simplification of borrowing procedures.

Enhanced transparency and better corporate governance were seen as essential to the new business environment that Tunisia was determined to establish, the ambassador stated. These measures would serve as the “best incentives to any potential investor”.

Tunisia is aiming for economic growth of around 5% during the transition period which is projected to last until 2013.

The country hopes to see the private sector playing a much greater role in the economy in the future with the state gradually withdrawing from active involvement.

As the he ambassador stated the medium term plan envisaged that the state would “continue to gradually disengage from those activities that can be handled by the private sector”.

The state will in future play a role in setting the conditions to create a “business environment that encourages free initiative while maintaining stable and constructive labour relations and enhancing cooperation” in Tunisian society, he explained.

Tackling unemployment particularly of graduates in the less developed regions of the country will remain “Tunisia’s top priority”. While the rate of unemployment was in excess of 18% generally, it was between 31% and 48% among graduates in some regions.

The longer term solution involved “an ambitious investment programme across the various economic sectors,” the ambassador said.

He announced that Tunisia was setting up two new “investment vehicles” to speed up the process of attracting investment. The Generational Investment Fund (AJYAL Fund) and the Deposit and Consignment Vehicle (CDC) would be operational by the end of the year.

AJYAL would be launched with “seed money of around $4bn and would finance projects that meet strict private investment criteria and restricted to “large ticket projects”.

In addition, there will be sub funds for specific sectors like infrastructure, agriculture, technology and tourism.

Tunisia estimated that the fund should ultimately generate aggregate investments in excess of $30bn during the five years 2012 to 2016.

Meanwhile, the CDC would be engaged in financing large infrastructure projects and supporting SMEs.

As the ambassador explained, the CDC would “finance projects which do not meet the investment criteria of private investors”.

In order to ensure the success of the investment plan, Tunisia was adopting major reforms in its financial, legal, judicial, public sector administration and education systems, H E Hatem Atallah emphasised.

Another important initiative to be launched soon would be concerned with industrial and technological development which envisages private sector cooperation to boost the technological basis of the national economy.

This aims to establish a stronger knowledge based economy driven by research and development and high tech content.

Tunisia’s long term decision to invest 7% of GDP in education over several decades meant that the country enjoyed high ranking in terms of the level and quality of its education.

Nevertheless, weaknesses still exist with regards to aspects of education, as well as healthcare, disposal income and gender issues, the ambassador said. This was why the Jasmin Plan was putting a “major emphasis on human development as a cornerstone of its ultimate success”.

To secure its future economic growth, the ambassador signalled that Tunisia intended to pursue its ambition of being granted “advanced status” with the European Union and it was also determined to expand its free trade agreements with its trading partners.

He said that Tunisia remained well positioned to become a trade and investment hub bridging commercial, financial and investment opportunities between Europe, Africa, the Middle East and the Far East.

Finally, the ambassador called on Tunisia’s friends and partners in Britain and internationally to show their support to ensure that the country is able to realise its ambitions embodied in the Jasmin Plan.

During the discussion that followed, George Kanaan, Arab Bankers Association, highlighted the gap between international funding pledges and actual dispersals, which he suggested meant that there was a need for a new development bank for the southern Mediterranean area.

It was felt there was a need for an institution to help attract investment to the region that would be able to supplement the financial assistance that is already being provided by the African Development Bank and the World Bank.

A related question concerned the role of the Maghreb Arab Union, which the ambassador described as “dormant” at present and in need of revisiting.

Tunisia regarded the strengthening of relations with its neighbours as a point of principle and a “strategic choice”, he said.

Its main trading partner had always been Libya and this would continue in the future.

On the issue of opportunities for the development of renewable energy, the ambassador stated that Tunisia, because it lacked oil reserves, was interested in clean energies but it had adopted strict environmental standards to protect its coastal areas in particular.

Asked about government guarantees for investors, the ambassador stressed that the state would be involved through the funds that were being established and that Tunisia had a good reputation for honouring its financial obligations.

On the development of higher education, H E Hatem Atallah said as Tunisia didn’t have an industrial base it was concentrating on establishing a knowledge-based and service economy through increased investment in research and development.

The roundtable proved to be effective in shedding light on the current and forthcoming plans of Tunisia and highlighted the opportunities that were emerging as the country re-established its economy on a sound footing for the future.

The ambassador was thanked for his detailed and illuminating presentation which expressed the optimism and confidence that was prevailing in Tunisia at the present time.

Global Arab Network

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Last Updated on Thursday, 22 September 2011 17:02

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