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Signs Of Life In Tunisia's Economy As Italian Trading Partners Get Back In Business

Tunisia’s recent “Jasmine revolution” has brought much of the country’s economy to a standstill. Foreign tourists are still a rare sight right now, but long-established Italian companies are eager to reignite old economic ties.

Article illustrative image Partner logo Tunisian economy has been grounded since the Jasmine Revolution (francesco sgroi)

TUNIS - At the first Italian-Tunisian business forum after the revolution, which took place last week in Tunis, jasmine flowers were everywhere: scattered on the desks and window sills, and even decorating men’s buttonholes. The flower – a symbol of the Arab spring – has replaced the pictures of former Tunisian president Zine el Abidine Ben Ali, in the streets and in all the offices of Tunisia’s transitional government.

At the forum, Tunisia’s new trade and tourism minister, Mehdi Houas (who came back from Paris only six months ago) met many Italian businessmen, as well as Italy’s industry minister Paolo Romani. “I am here to reassure the Italian business community and also to be reassured by the Tunisian authorities about the further steps towards transition of a country which is a dear friend of Italy,” Romani told him.

Italy is Tunisia’s second most important trading partner (after France), with a global volume of trade of 5.8 billion euros. Around 740 Italian companies, which together employ 55,000 people, do business in Tunisia. The Italian clothing retailer Benetton, for example, employs 15,000 Tunisians.

“The situation is improving but is still fragile, given that the transitional government has not been legitimized by an election,” said sources at the Italian embassy in Tunis. The election of the constitutional assembly has been postponed from July 24 to October 24, which some see as a setback. Moreover, the war in neighboring Libya – which has prompted almost 2,000 refugees to cross the border almost every day – is also adding strain. In Tunis, a sense of insecurity makes people stay indoors as soon as the night falls. Thousands of former detainees have been freed and burglaries have picked up. Many people have installed iron bars over their windows. Armored vehicles are parked in front of the national television building.

Collapse of tourism

Many people in Tunisia are worried about the increasing appeal of the Islamic party – which, according to some polls, could obtain about 20% of the votes –, the high unemployment rate among the young. The collapse, by as much as 50 percen, of the tourism sector has had particularly devastating results, since it employs around 8% of the total workforce. This summer, the resort complexes of the Italian tour operator Valtour will remain closed in both Tabarca and Bizerte.

If Italian tourists have decided to avoid Tunisia this year, Italian companies have stayed put. Colacem, a cement manufacturer, and Gervasoni, a steel manufacturer, have continued making business as usual; another Italian company, Clerprem, is still producing car armrests in Bizerte, in northern Tunisia.

Construction is resuming as well, especially in Tunis, where many buildings still await to be completed. Todini, a construction company, will build two plots of the new expressway between the cities of Gabes and Sfax, for a total value of 100 milllion euros. Ferretti Construction has recently resumed work as usual, and the Italian Gwh, a biomasses producer, and the French Thales, which produces radio navigation systems, have recently opened up new offices in Tunisia. Still, some companies have complained about a number of custom issues at the borders; the uncertainty linked to the next elections and government also makes some payments unsure.

But no one doubts that the economy can help Tunisia’s transition to democracy. During the Italian-Tunisian forum, Tunisian ministers promised a series of investment incentives for Italian businessmen willing to open new firms (such as exemption from paying any taxes or VAT for export only companies during the first ten years of investment). Tunisia is also inviting small and medium firms to invest in mechanics, electronics and food farming in a country that is now the central trade platform towards Egypt, Morocco and Jordan. 

“This is positive,” said Michele Tronconi, president of the Italian Textile and Fashion Federation. “Now they have to liberalize distribution, real estate, transportation and media, all of which were until now under the monopole of Ben Ali’s family.”

Photo -francesco sgroi


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