TUNISIA ECONOMIC HIGHLIGHTS

UNCLAS TUNIS 000791 SIPDIS SENSITIVE SIPDIS STATE FOR NEA/MAG (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 E.O. 12958: N/A TAGS: ECON ETRD EINV EFIN ECPS TS SUBJECT: TUNISIA ECONOMIC HIGHLIGHTS REF: A. TUNIS 516 ¶B. 06 TUNIS 2753 ¶1. (U) This cable contains highlights of recent economic developments in Tunisia on the following topics: ¶A. IMF Concludes 2007 Article IV Mission ¶B. Qatar Petroleum Awarded Skhira Refinery Tender -------------- IMF Concludes Article IV Mission -------------- ¶2. (U) Following the Article IV consultations in Tunisia, the IMF released a statement praising the GOT's efficient management of the economy, strong growth, and macroeconomic stability. The IMF noted that the banking sector has improved noticeably in the past three years with the ratio of nonperforming loans (NPLs) declining from 24 percent of total loans in 2003 to 19.2 percent in 2006. While praising Tunisia's solid economic performance, the IMF emphasized that unemployment remains relatively high (13.9 percent),especially among university graduates. The IMF recommended strengthening Tunisia's macroeconomic position, continuing liberalization, stimulating private investment, and pursuing reform of the education and training systems. The final report will be released in July. ¶3. (SBU) Comment: The IMF recommendations are unlikely to differ from those issued by Deputy Managing Director Murilo Portugal at the conclusion of his visit in April (Ref A). Many of the reforms urged by the IMF, such as liberalization of the capital account and the reduction of NPLs, are already on the GOT agenda; the recommendations are unlikely to push the timeline for economic reform ahead of the current GOT schedule. End Comment. -------------- - Qatar Petroleum Awarded Skhira Refinery Tender -------------- - ¶4. (U) On May 26, Qatari Deputy Prime Minister and Minister for Energy and Industry, and Chairman of Qatar Petroleum (QP),Abdullah Bin Hamad Al-Attiya, and the Tunisian Minister for Industry, Energy, and Small and Medium Enterprise, Afif Chelbi, signed a Memorandum of Understanding awarding the Skhira refinery tender to state-owned Qatar Petroleum. The tender, estimated to be US $2 billion investment, is a 30-year build, own, and operate project. The Skhira oil refinery will be located in the Gulf of Gabes on the eastern coast of Tunisia. The refinery will have a capacity of about 120,000 to 150,000 barrels per day and is expected to be completed in 2011. ¶5. (SBU) COMMENT AND BACKGROUND: With the Skhira refinery, Tunisia aims to boost Tunisia's refinery capacity to meet the growing demand for oil products. Currently, Tunisia has only one refinery located in Bizerte, with a daily capacity of 30,000 barrels. The new refinery would give Tunisia the capacity to refine all domestic crude oil production. According to ETAP, Tunisia's state-owned oil company, Tunisia produces on average about 112,000 barrels of crude oil per day. QP's investment follows Qatar Telecom's foray into the Tunisian market (Ref A) and reflects the growth of Qatari and Gulf (Ref B) investment in Tunisia. END COMMENT AND BACKGROUND. GODEC