TUNISIA ECONOMIC HIGHLIGHTS

UNCLAS SECTION 01 OF 02 TUNIS 001741 SIPDIS SIPDIS NEA/MAG FOR MAYA HARRIS, EB/CIP STATE PASS USTR (BELL),USPTO (ADLIN),USAID (METZGER) USDOC FOR ITA/MAC/ONE (ROTH),ADVOCACY CTR (JAMES),AND CLDP (TEJTEL) CASABLANCA FOR FCS (ORTIZ) E.O. 12958: N/A TAGS: ECON EINV ENRG ETRD ELAB KIPR TS SUBJECT: TUNISIA ECONOMIC HIGHLIGHTS REF: A. TUNIS 12 ¶B. 05 TUNIS 2234 ¶C. 05 TUNIS 2433 ¶1. This cable contains highlights of recent economic developments in the following areas: ¶A. IPR Enforcement Strengthened ¶B. Pending bounced check legislation ¶C. Rising oil prices affecting balance of trade ¶D. Oil transport contract with Algeria via pipeline ¶E. UAE investments in Tunisia increasing -------------- ¶A. IPR Enforcement Strengthened -------------- ¶2. The GOT intensified its campaign to strengthen its intellectual property rights (IPR) regime via increased public awareness, media campaigns, and raids launched against counterfeit products and trademarks violations. On June 29, 2006, the Ministry of Commerce conducted a raid on vendors of counterfeit personal care products, in one of Tunis, markets. According to official sources, these campaigns and raids will continue to be carried out periodically and will cover all trade sectors. Recently, the Minister of Commerce explained the GOT,s plan to tackle the "black market" via strict application of existing laws and passing of tough new legislation including enhanced enforcement powers for customs officials. Comment: GOT says this every year but recently there has been an increase in the number of prosecutions (71) against parallel market operators. Authorities have also conducted inspections of trade fair exhibitions resulting in 111 businesses being banned from participation in the trade fairs due to IPR violations. GOT appears to be getting the message that protection of IPR is good for the economy. End comment. -------------- ¶B. Pending bounced check legislation -------------- ¶3. There is new legislation before parliament which will address the problem of bounced checks. New procedures will be set in place to help vendors determine whether a customer has sufficient funds in his/her bank account to cover checks written against that account. Any interested person, or entity, can contact the Central Bank and verify whether there are sufficient funds in an account to cover the customer,s check before accepting that check as payment for goods purchased. All banks have been asked to inform the Central Bank about the reasons behind their refusal to accept checks written against a customer,s account (i.e. reported as stolen or lost check, frozen account, or account closure). The Central Bank will take on the role of central depository of checking account information. The new law requires banks to provide the Central Bank with accurate account information. -------------- --- ¶C. Rising oil prices affecting balance of trade -------------- --- ¶4. According to the Tunisian Central Bank, the current deficit increased to TND 693 million (USD 533.07 million) over the first five months of 2006, corresponding to 1.7 percent of GDP compared to 0.8 percent over the same period in 2005. The trade deficit increased by about TND 360 million (USD 276.92 million) due largely to the increased cost of petroleum products. If energy products are excluded, the increase would be TND 142 million (USD 109.23 million). Imports of energy products increased notably (50.1 percent of total imports),as did imports of capital goods (14.4 percent). Imports of raw materials and semi-finished products were also up. Energy exports accounted for 39.7 percent of total exports and mechanical and electrical industries accounted for 20.7 percent. Export sales in textile and clothing sector dropped by 4.2 percent. As of TUNIS 00001741 002 OF 002 June 26, 2006, foreign currency reserves amounted to TND 4.989 billion (USD 3.837 billion),corresponding to 100 days of imports. Foreign trade provisional data (thru June 20, 2006) indicates increases of 10.2 percent in exports and 12.7 percent in imports. -------------- -------------- ¶D. Oil transport contract with Algeria via pipeline -------------- -------------- ¶5. Algeria,s Sonatrach signed a renewable, one year contract with Societe Tunisienne de Transport par Pipeline au Sahara (Trapsa). The contract provides for Trapsa to carry Algerian oil from the Illizi basin on the Algerian-Tunisian border to ports on the Mediterranean for shipment abroad. -------------- ¶E. UAE investments in Tunisia increasing -------------- ¶6. Recently Tunisia has become attractive for United Arab Emirates'(UAE) investments, particularly two companies: Dubai Holding and Emaar Properties PJSC. In 2005, Dubai Holding bought a 12 percent stake in one of the major Tunisian conglomerates, Abdennadher Group. In March 29, 2006, Tecom-DIG, a branch of Dubai Holding won the bid to buy 35 percent of Tunisia's public telephone operator Tunisie Telecom. On June 28, 2006, President Ben Ali approved Dubai Holding's project to invest USD 6 billion in developing the South Tunis lake area. This mega-project will involve the building of a business center, marinas, residential and commercial buildings, sports and leisure facilities, as well as light, non-polluting industries. On April 15, 2006, Emaar Properties PJSC announced its plans to develop the USD 1.88 billion Marina Al Qussor project on Tunisia's eastern coastline. This 1,092 acre Marina development in the governorate of Sousse will include residential options, tourist attractions, and a large marina. The size of the project indicates the importance of tourism to Tunisia,s economic development. Tunisia attracted 6.4 million tourists in 2005 and is aiming for tourism revenue of close to USD 2 billion in 2006. HUDSON