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

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A. IPR Enforcement Strengthened
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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.

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B. Pending bounced check legislation
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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.

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C. Rising oil prices affecting balance of trade
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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.

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D. Oil transport contract with Algeria via pipeline
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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.

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E. UAE investments in Tunisia increasing
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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