TUNISIA ECONOMIC HIGHLIGHTS: Feb. 1 - Feb. 15

UNCLAS SECTION 01 OF 02 TUNIS 000263 SIPDIS SENSITIVE SIPDIS STATE FOR NEA/MAG (HOPKINS AND HARRIS) STATE PASS USTR (BELL),USPTO (ADLIN AND ADAMS),USAID (MCCLOUD) USDOC FOR ITA/MAC/ONE (NATHAN MASON),ADVOCACY CTR (JAMES),AND CLDP (TEJTEL) CASABLANCA FOR FCS (ORTIZ) LONDON AND PARIS FOR NEA WATCHER RABAT FOR FAS (FAY) E.O. 12958: N/A TAGS: ECON ETRD EAGR EFIN KFLU ELAB TS SUBJECT: TUNISIA ECONOMIC HIGHLIGHTS: Feb. 1 - Feb. 15 REF: A. TUNIS 143 ¶B. 06 TUNIS 2749 ¶1. (U) This cable contains highlights of recent economic developments in Tunisia on the following topics: ¶A. AMU Considers Creation of Maghreb Debit Card ¶B. GOT to Hire 12,000 Employees ¶C. Avian Influenza: Tunisia Suspends Poultry Imports From Affected Countries -------------- AMU Considers Creation of Maghreb Debit Card -------------- ¶2. (U) On February 8 and 9, representatives from Arab Maghreb Union (AMU) countries met in Tunisia to discuss harmonizing monetary regulations and, more specifically, the creation of a Maghreb debit card. Currently, 5 million bank cards are in use in the five AMU countries and due to non-convertibility of currencies, debit cards are not always honored outside the country in which they are issued. To promote Maghreb financial integration, the AMU goal is for Maghreb countries to double the number of cards in circulation -- to 10 million -- by 2010. ¶3. (SBU) Comment and Background: The increased use of credit cards in Tunisia reflects growth in the commercial banking sector. According to the Arab Tunisian Bank (ATB),there are roughly 1.1 million bank cards currently in use in Tunisia, a 15 percent increase over 2005 figures. While this has facilitated a limited expansion in e-commerce, the non-convertibility of the Tunisian dinar continues to limit Tunisians' ability to make purchases outside Tunisia, including in AMU countries. The GOT's recent decision to create a credit card ("carte allocation touristique") for use outside of Tunisia (Ref B) and to raise the yearly foreign exchange allowance will permit Tunisians a greater degree of flexibility in spending money while abroad. In addition, the upcoming implementation of reciprocal convertibility between Libyan and Tunisian dinars will facilitate economic integration between the two countries (Ref A). The development of a bank card for use throughout the Maghreb would be a welcome step to facilitate commerce, though it remains to be seen how this will impact currency convertibility between the countries. End Comment and Background. -------------- GOT to Hire 12,000 Employees -------------- ¶4. (U) On February 13, the Minister of Civil Service and Administrative Development announced that the GOT will hire 12,000 employees in 2007 (a number corresponding to about 70 percent of this year's university graduates). Half of the new jobs will be created in the Ministries of Education and Training, Higher Education and Scientific Research. ¶5. (SBU) Comment: Lowering the unemployment rate and creating jobs for new graduates is a key priority for the GOT. Although the official unemployment rate is 14.2 percent, unemployment among university graduates is significantly higher. Creating jobs through public sector hiring provides a temporary solution that will not address the underlying issues behind Tunisia's high unemployment rate. Rather than stimulate private sector growth through economic reforms, the GOT has chosen to remain the employer of last resort. End Comment. -------------- Avian Influenza: Tunisia Suspends Poultry Imports from Affected Countries -------------- ¶8. (U) On February 11, the National Avian Flu Commission decided to suspend import of poultry and poultry products from Hungary, United Kingdom, Egypt and Nigeria -- countries recently reporting H5N1 TUNIS 00000263 002 OF 002 cases. ¶9. (U) Comment and Background: This is not the first time the GOT has suspended poultry imports in response to avian influenza (AI). The GOT took similar measures in late 2005 following AI outbreaks in Europe and several African countries. Tunisia relies on imported poultry stock (one-day chicks and hatchery eggs) -- mainly from Europe-- to sustain the domestic poultry sector. End Comment and Background. GODEC