GENERAL ECONOMIC AND POLITICAL SITUATION

Hon’ble Minister for Science & Technology and Ocean Development, Shri Kapil Sibal, visited Tunisia from April 26-30. During his stay in Tunis, he was received by Tunisian PM Mohamed Ghannouchi. He also met his Tunisian counterpart, Dr. Taieb Hadhri, Minister of Scientific Research, Technology & Competency Development. A Programme of Cooperation in the fields of Science & Technology between India and Tunisia for the period 2006-2008 was also signed. The Hon’ble Minister also called on Minister of Communications Technology, Dr. Montassar Ouaili and Minister of Public Health, Dr. Ridha Kechrid.

Visit of Indian drugs & pharmaceuticals delegation

A five-member Indian drugs and pharmaceuticals survey delegation was on a 7-day (April 9-15) visit to Tunisia. The delegation was led by Shri Paresh Johri, Deputy Secretary in the Department of Chemicals & Petrochemicals, and comprised of representatives from Department of Bio-technology, National Institute of Pharmaceutical Education & Research (NIPER), PHARMEXCIL and M/s. Ranbaxy (Morocco). On April 15, Ambassador and Mr. Johri called on the Tunisian Minister of Public Health, Mr. Ridha Kechrid and handed him a letter of invitation from the Hon’ble Minister of Chemicals & Fertilizers and Minister of Steel, Shri Ram Vilas Paswan, to visit India. During its stay, besides visiting a couple of drugs and pharmaceuticals laboratories, the delegation met Tunisian officials from the Ministry of Public Health, Ministry of Industry, Energy & Small & Medium Enterprises, Foreign Investment Promotion Agency (FIPA), Finance Bank of Small & Medium Enterprises (BFPME), Central Pharmacy of Tunisia, National Chamber of Pharmaceutical Industries, Institute Pasteur de Tunis, etc. The visiting delegation had fruitful talks with the Tunisian authorities. Pasteur Institute of Tunisia desired to have closer cooperation with Indian organizations like NIPER. Both the sides expressed their intentions to have regular interactions in order to further boost India-Tunisian cooperation in the drugs and pharma sector.

A three-member Tunisian pharma delegation consisting of Chemist Inspectors was on a 14-day visit (April 8-21) to India. The delegation visited/inspected a number of Indian drugs and pharmaceuticals laboratories like Dr. Reddy’s, Shanta Biotech, Aurobindo, Cipla, etc. These Inspectors also inspected bulk drug facilities in Hyderabad for supplying key ingredients to 18 drug manufacturers in Tunisia.

Tunisia keen to set up offshore hospitals with Indian partners

According to news reports, Tunisia is keen to have joint ventures with Indian hospitals for setting up offshore hospitals in Tunisia which would cater to European patients. Tunisia is just an hour away from the European continent. The pharmaceuticals delegation which visited Tunisia recently, is reportedly upbeat about the business possibilities with Tunisia in health tourism and pharmaceuticals. According to news reports, Tunisia, which is a focus country for Indian exports, wants 66% FDI in hospitals and reserve 80% of the beds for European patients to qualify for the ‘offshore hospital’ status needed to rope in insurers. Flying time is a criteria for reimbursement for many insurers in Europe and is a major roadblock in the growth of health tourism. Cost of treatment in Tunisia is one-fifth of that in Europe. Indian drug makers, led by Ranbaxy, Cipla and Hetero Drugs, are exploring opportunities for supplying drug ingredients and for setting up manufacturing plants in Tunisia, which will provide them customs duty free access to the EU countries, due to Tunisia’s FTA with the EU, which is world’s third-largest pharmaceutical market after the US and Japan.

II. INTERNAL

According to a press release of the Central Bank of Tunisia’s Executive Borad Meeting which was held on April 28, the first quarter indicators show a recovery in industrial activity while tourism and air transport registered a certain deceleration. Recovery in industry is corroborated notably by the 4% progress in high and medium voltage electricity consumption at end February 2006 compared to just 2.1% during the same period last year. In tourism, non-resident entries and overall bed nights posted during the first quarter of 2006 a contraction by 5.1% and 6.4% respectively compared to increases by 7.5% and 9.6% during the same period in the previous year.

Available data as of April 20, 2006 regarding foreign trade show a progress by 10.2% for exports and 10.9% for imports, meaning a trade deficit of 1072 MTD. Energy excluded, the deficit amounted to 714 MTD vs. 725 MTD the year before. Exports increase concerned mainly energy (47.4%), the sector of mines, phosphates and by products (29.4%) and mechanical and electrical industries (18.8%) while a 6.2% regress was registered at the level of sales of textiles and clothing items.

Imports rise concerned notably energy products (54.2%), foodstuff (14.4%), and to a lesser degree capital goods (10.5%) and raw materials and semi-finished products (5.6%).

Tourist earnings went up by 2.8% as of April 20, 2006 totalling 548 MTD compared to 533 MTD during the same period the year before.Work remittances transferred by Tunisians working abroad rose by 4.7% to came in at 390 MTD as of April 20, 2006 compared to about 373 MTD during the same period the previous year.

Taking into consideration these factors, current deficit amounted to 129 MTD or 0,3% of GDP during 2006 first quarter.

On the other hand, reserves in foreign currency amounted as of April 27, 2006 to 5281 MTD, the equivalent of 109 days’ imports against 4502 MTD and 99 days at the same date in 2005.

As for consumer prices, their monthly slide came in at 0.4% in March 2006 and the average rate of inflation amounted to 4.3% during the first quarter of the current year. On the foreign exchange market, the dinar appreciated by 2.6% against the US dollar and depreciated by 2.1% against the euro from the start of the year till April 27, 2006.

III. ECONOMIC

Oil/Gas found in Tunisia

M/s. OMV Group, an Austrian oil exploration company, reportedly found oil and gas fields that would yield ‘reasonable and stable amounts of high quality oil and gas’ some 700 kilometers from Tunis. The company is reportedly carrying out exploration in the far south on the borders with Libya and Algeria. OMV and Tunisian national oil company, ETAP, agreed on a 50-50 partnership in exploring oil and gas fields in the area. OMV had been operating in Tunisia since the early 1970s. OMV's daily share is around 8,000 barrels out of the produced 338,000 barrels. OMV's overall confirmed reserves of oil and gas exceed 4.1 billion barrels.

Tunisia expects 5% increase in tourism revenue in 2006

The Tunisian government is expecting a 5% increase, compared to 2005, in tourism revenue to reach a record high level of US$1.99 billion in 2006, according to Tourism Minister Tijani Haddad during a recent Tourism Seminar. Tunisia, which is facing fierce competition from Morocco, Turkey and Egypt, is trying to diversify its tourism portfolio and orientate towards high-end tourism, with golf, sailing and cultural tourism. It is also trying to attract tourists from new destinations -- especially China, Eastern Europe and the Gulf states. Western European currently accounts for 75% of Tunisia's tourist income.

IV. EXTERNAL

Italy

According to media reports, seven Tunisians were arrested in the waters off Gabes, 400 kilometres south of Tunis, on board a boat on which they intended landing clandestinely on Lampedusa or Linosa in Italy. The arrest reportedly took place on the basis of the bilateral accord between Italy and Tunisia which aims at curbing clandestine immigration and to hit at Mafia type organisations that organise human trafficking.

Tunisia and Italy have signed two agreements worth a total of $400-million to expand the capacity of a pipeline carrying gas from Algeria to Italy via Tunisian territory. The pipeline's capacity is reportedly expected to rise to about 33,9-billion cubic metres per year from 27,4-billion cubic metres. According to Milan’s Chamber of Commerce, trade between Tunisia and Italy registered a 2% increase in 2005, worth Euros 4 billion. Topping the list of Tunisian products imported by Italy are clothes and accessories (38.6%), followed by fat/vegetable oil (11.3%) and fuel oil (10.6%). Tunisia mostly imports oil derivatives (26.3%), fabrics (19%) and electronic equipment (6%) from Italy.

According to media reports, Tunisia's National Tourist Board would be organizing a road-show destined to promote Tunisian tourism in Italy. The road show which is scheduled from May 8 to 13, 2006 will tour several major Italian cities such as Bari, Naples, Florence, and Genes. The roving exhibition is composed of representatives of Tunisia 's airline companies, including Tunisair and Tuninter as well as the Tunisian Maritime Company (CTN). Hotels, travel agents and representatives of various  Tunisian tourist areas will also take part in the exhibition. The main aim of the event is to promote a region by region approach to Tunisian tourism so as to emphasize the specificities of each area the country.

Austria

On April 5, Tunisia and Austria signed a financial co-operation agreement under which Austria will provide the Tunisian government Euros 75 million under preferential conditions. The agreement, signed during a visit by Tunisian Foreign Minister Abdelwahab Abdullah to Austria, aims at boosting bilateral trade and reinforcing partnerships and investments between the two countries' public and private sectors. According to news reports, security, anti-terrorism and disaster aid co-operation are also being worked out. During his visit, the Tunisian FM also called on the Austrian President, Heinz Fischer.

Belgium

Belgian Deputy Premier and Finance Minister, Didier Reynders, visited Tunis on April 10. During his stay, he met FM Abdallah. The talks centered on the bilateral relations, EU-Mediterranean cooperation. The next meeting of the EU-Mediterranean Finance Ministers would reportedly be held in Tunis in June.

Spain

M/s. ABS of Spain has reportedly received a large order from Tunisian Government for supply of equipment for the construction of two new wastewater treatment plants in Tunisia, called Sud Meliane II and Choutrana II.Another Spanish firm, M/s. Dytrassa, will construct and commission the two treatment plants that will serve a population of about 300,000. The total investment is Euros 32 million.

Secretary of State in charge of European affairs, Hatem Ben Salem, visited Madrid from April 5-7. During his visit, he met his Spanish counterpart as well as the Director General of the Spanish International Co-operation Agency, Mr. Ricardo Martinez Vasquez and discussed the opportunities for cultural and technical cooperation as well as inter-university exchanges. He also called on the Spanish Congress Speaker, Manuel Marin Gonzalez.

Germany

Mr. Gunter Glose, German Deputy Foreign Minister, visited Tunis on April 26. During his visit, he met with Minister for Industry, Energy and Small & Medium Sized Enterprises, Afif Chelbi. The two sides discussed about the new opportunities for boosting bilateral cooperation in the industrial and energy sectors. During his visit, Mr. Glose also called on the Speaker of the Chamber of Deputies, Mr. Foued Mebazaa.

Nigeria

Nigerian Minister of Public Health, Mr. Ary Ibrahim, visited Tunis on April 20. During his visit, he met with Foreign Minister Abdelwaheb Abdallah. The talks centered around ways to improve bilateral cooperation in the fields of health, family planning, tourism, etc.

Gabon

The Tunisian-Gabon Joint Commission meeting was reportedly held in Tunis on April 12. Mr. Jean Francois Ndongou, Delegate Minister to the Gabonese Minister for Foreign Affairs and the Tunisian State Secretary for Foreign Affairs, Salaheddine Jemmali, co-chaired the meeting. The Joint Commission meeting dealt with a wide range of sectors including higher education, tourism, health, trade and solidarity.

Syria

Syrian PM, Mohammed Naji Attar, accompanied by a high level delegation, visited Tunis from April 20-21. During his stay, he co-chaired, along with PM Mohamed Ghannouchi, the 7th Meeting of the Tunisian-Syrian Joint Commission Meeting. A number of Agreements were signed in the fields of textiles, fertilizers, education, scientific research, media, law, etc. during the visit. The Tunisian PM also called on President Ben Ali.

Iran

Mr. Esfandiar Rahim Mechayi, Head of the Iranian Tourism & Heritage Protection Organisation, led an Iranian delegation to attend the meeting of the Tunisian-Iranian Joint commission on Tourism. During his visit, he met with his Tunisian counterpart, Tijani Haddad as well as Minister of Culture and Heritage Safeguard, Mohamed Aziz Ben Achour. The two sides signed an Agreement on Cooperation providing for enhanced participation by the two countries’ experts in tourism exhibitions and cultural weeks. The Iranian Minister also called on PM Mohammed Ghannouchi.

UAE

According to media reports, UAE’s developer Emaar Properties is planning a $1.82 billion real estate project in Tunisia that will target wealthy holidaymakers looking to buy homes on the Mediterranean coast. The Dirham 6.7 billion Marina Al Qussor project will be a 442 hectare (1,092 acre) residential and leisure development on Tunisia's eastern coast. Tourism is Tunisia's main foreign currency earner and the main employer after the labour-intensive agriculture sector. A record 6.4 million tourists visited Tunisia last year, generating revenues of 2.56 billion dinars. Tunisia reportedly wants now to diversify tourism industry that has so far focused primarily on low-budget beach tourism and would encourage wealthy holidaymakers to buy homes in the North African country. Marina Al Qussor will have 4,000 residential units, six hotels, a marina, a golf course, and retail space.

Korea

According to media reports, Minister of Development and International Cooperation Khelil Lajimi, who is responsible for international coordination and foreign investment, led a high level 12-member delegation of Tunisian officials, economic experts and business leaders to Korea, to take part in the 5-day Ministerial Conference on South Korea-Africa Economic Cooperation in Seoul. The Conference, organised on the initiative of the African Development Bank and the Korean Import-Export Bank, was aimed at examining the prospects for the economic partnership and the means for its further development.

The Tunisian Minister also delivered a key-note address in a seminar on business and investment opportunities in Tunisia like infrastructure projects, privatization programs, and other opportunities for partnership and cooperation between Korea and Tunisia.

Japan

Minister of Scientific Research, Technology and Competency Development, Taieb Hadhri, chaired a ceremony on April 3 during which the Director General of Borj Cedria Technopole and the Permanent Representative of the Japan International Co-operation Agency (JICA) signed a Co-operation Agreement on human resources training and technology transfer between the two countries in the field of managing technological poles.

Singapore

Singapore’s Minister of State for Foreign Affairs, Goh Chok Tong, visited Tunis. During his visit, he met Tunisian Foreign Minister Abdelwahab Abdallah. The talks centered on bilateral relations as well as regional and international issues. Currently, there is no Singaporean Ambassador accredited to Tunisia. After the meeting, it was announced that soon a Singaporean Ambassador would be stationed in Tunis. Bilateral trade between the two countries presently amounts to only US$ 22 million. During Mr. Tong’s stay, a Memorandum of Understanding was also signed between the Singapore Business Federation (SBF) and the Tunisian Employers' Association for Industry, Trade and Handicrafts (UTICA) to enhance bilateral trade.

V. Multilateral

AFESD grants Tunisia two loans

According to news reports, Tunisia signed on March 3, two loan agreements worth Tunisian Dinars 89 million with the Arab Fund for Economic and Social Development (AFESD). The loans, which will be repaid over 22 years with a five-year grace period and an interest rate of 4.5%, are meant for road projects and for the construction of ''El Kebir'' dam in the Gafsa province. Established in 1968, AFESD is an autonomous regional Pan-Arab development finance organization with the membership of Arab League States.

World Summit of Innovation & Entrepreneurship

Communications Technologies Minister, Montassar Ouaili, led the Tunisian delegation to the World Summit of Innovation & Entrepreneurship, which was held in Oman from April 1-3. In his speech, the Minister said that Tunisia has been increasingly investing 1% of the GDP in the scientific & technological research programmes, which would be raised to 1.25% by 2009. He also added that Tunisia has worked out a specific programme for the setting up of 10 technological poles to serve the different sectors of economic activities.

Joint Africa Institute Seminar

A five-day Joint Africa Institute Seminar was held in Tunis from April 17-21. The theme of the Seminar was, “The Role of National Parliaments in Good Governance and Poverty Reduction in Africa.” The purpose of the Seminar was to support capacity enhancement in African Parliaments and was reportedly developed in response to the growing awareness that Parliaments have a critical role to play in the Poverty Reduction Strategy Papers (PRSP) process. The Joint Africa Institute. which was set up in 1999 in Tunis, is a partnership between the African Development Bank, the International Monetary Fund and the World Bank and has the mandate to support the capacity enhancement needs of African governments in areas of financial, economic, and social development.

Mediterranean Forum

Mr. Hatem Ben Salem, Secretary of State in charge of European Affairs in the Tunisian Foreign Ministry visited Cairo from April 22-23 to attend the Extraordinary Meeting of the Mediterranean Forum. Delegations from a number of Arabic and European countries discussed the Barcelona Process which aims for closer cooperation among the member countries in the fields of politics, culture, trade, etc. On the sidelines of his visit, Mr. Salem had a series of meetings with the Heads of the participating countries’ delegations.

African Ministerial Congress on IT

Minister of Communications Technologies, Montassar Ouaili, visited Cairo to take part in the first African Ministerial Congress on IT which was held in Cairo from April 18-20. The meeting examined the role of the African countries in the materialization of the Tunis Commitment and Action Programme. Mr. Ouaili, in his Address, highlighted the role of the African countries in the implementation of the Tunis WSIS decisions. During his visit, Mr. Ouaili had several bilateral talks with African Ministers. He also reportedly met a number of Egyptian businessmen highlighting the potential offered by partnership between Tunisia and Egypt and the importance of exchanges of visits and experiences to boost investments.

Industrial development pact with Gulf Organisation for Industrial Consulting

According to media reports, Tunisian Industry Promotion Agency has signed a MoU on April 11 with the Gulf Organisation for Industrial Consulting (GOIC), which is aimed at the industrial development. The agreement aims at exchanging information and experiences in consultancy field. The terms of the agreement also include sharing experts, cooperation in field studies and surveys and executing the special programmes of training and organising symposiums. As a first step of the agreement, GOIC will arrange a visit for businessmen from GCC member-states to Tunisia to explore investment opportunities in that country.

ICT Awards

According to media reports, Presidents of Rwanda, Tunisia and Senegal have been nominated for this year's ICT Africa Awards in recognition of their role in ICT development in their respective countries. Mr. Paul Kagame, Mr. Ben Ali and ex-President Mr. Abdou Diouf, respectively, will receive the awards at the end of the ICT African Ministerial Summit due early May in the Rwandan capital, Kigali. The Summit will discuss strategies for securing increased investment in infrastructure in the ICT sector in Africa as well as other relevant ICT issues affecting the continent. The Awards were established in 2004 to promote the use of Information and Communication Technologies (ICT) in Africa and to encourage best practice. The Awards are open to all Africans and African based organisations, public bodies, and not-for-profit organisations that are directly or indirectly engaged in the promotion of the use of ICTs.

The Report has been seen by the Ambassador.