VZCZCXRO5832
PP RUEHTRO
DE RUEHTU #2418/01 2641213
ZNR UUUUU ZZH
P 211213Z SEP 06
FM AMEMBASSY TUNIS
TO RUEHC/SECSTATE WASHDC PRIORITY 1898
INFO RUEHAD/AMEMBASSY ABU DHABI PRIORITY 0794
RUEHAS/AMEMBASSY ALGIERS PRIORITY 7291
RUEHLO/AMEMBASSY LONDON PRIORITY 1180
RUEHNK/AMEMBASSY NOUAKCHOTT PRIORITY 0782
RUEHFR/AMEMBASSY PARIS PRIORITY 1633
RUEHRB/AMEMBASSY RABAT PRIORITY 8219
RUEHTRO/AMEMBASSY TRIPOLI PRIORITY 0393
RUEHCL/AMCONSUL CASABLANCA PRIORITY 3993
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 TUNIS 002418 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/MAG (HARRIS) AND EB/CIP 
STATE PASS USTR (BELL), USPTO (ADLIN AND ADAMS), USAID 
(MCCLOUD) 
USDOC FOR ITA/MAC/ONE (ROTH), ADVOCACY CTR (JAMES), AND 
CLDP (TEJTEL) 
CASABLANCA FOR FCS (ORTIZ) 
LONDON AND PARIS FOR NEA WATCHER 
 
E.O. 12958: N/A 
TAGS: ECON ETRD ELAB EAIR EINT ECPS KTEX TS
SUBJECT: TUNISIA ECONOMIC HIGHLIGHTS: SEPTEMBER 1 - 15 
 
REF: A. TUNIS 2303 
 
¶B. TUNIS 1741 
¶C. TUNIS 629 
 
¶1. (U) This cable contains highlights of recent economic 
developments in Tunisia on the following topics: 
 
¶A. Unemployment Holds Steady at 14.2 Percent 
¶B. Tunisia and Morocco Continue Dialogue on Cooperation 
¶C. Emirates Lands in Tunisia 
¶D. Italy's Benetton Invests in Tunisian Textiles 
¶E. Tunisie Telecom Launches Mobile Internet and Email 
----------------------------------------- 
Unemployment Holds Steady at 14.2 Percent 
----------------------------------------- 
 
¶2. (U) According to the Tunisian Central Bank's (BCT) annual 
report, the 2005 unemployment rate remained at 14.2 percent 
of the working population, which is 3.4 million workers, for 
the second consecutive year.  The unemployment rate among 
university graduates reached 14.8 percent, up slightly from 
14.1 percent in 2004. 
 
¶3. (SBU) Comment: While the unemployment figures are not 
surprising, they remain troubling for the GOT-- especially 
when coupled with an overall slowdown in the economy.  In 
2005, economic growth dropped to 4.2 percent from 5.8 
percent in 2004.  In spite of the GOT's efforts to spur job 
creation, private sector job growth has not increased to 
meet the demand.  The higher unemployment rate among 
university graduates, however slight, is also an acute 
concern, which the government says it plans to address by 
providing job training for graduates.  End Comment. 
 
--------------------------------------------- ------- 
Tunisia and Morocco Continue Dialogue on Cooperation 
--------------------------------------------- ------- 
 
¶4. (U) On September 7, Tunisian Prime Minister Ghannouchi 
visited Morocco for the 13th meeting of the Moroccan- 
Tunisian Joint High Commission.  Officials from the two 
countries discussed the implementation of previously signed 
trade agreements and the acceleration of bilateral trade and 
investment.  The two parties signed a Memorandum of 
Understanding (MOU) targeting increased cooperation and 
setting out a number of joint priorities in the mining 
sector, which is an important industry in both countries. 
The two counties also signed an agreement for reciprocal 
recognition of trading standards certificates, in an effort 
to eliminate legal issues surrounding bilateral trade and 
exchange.  Other agreements, covering tourism, poverty 
alleviation, and media were also signed.  In 2005, trade 
between Tunisia and Morocco reached 220 million dinars 
(roughly 166 million USD), up from 122 million dinars (90 
million USD) in 2000. 
 
¶5. (SBU) Comment and Background:  The talks with Morocco 
represent a broader GOT focus on increasing intra-Maghreb 
trade.  In August, Tunisian officials participated in a 
similar series of meetings at the 19th session of the Libyan- 
Tunisian Joint High Commission (ref A).  Although the 
Maghreb countries have signed agreements to allow duty-free 
trade in principle, in practice many barriers still remain. 
In addition, both Morocco and Tunisia are signatories to the 
2004 Agadir agreement, which will create a free trade zone 
with Egypt and Jordan but has not been fully implemented. 
End Comment and Background. 
 
------------------------- 
Emirates Lands in Tunisia 
--------------------------- 
¶6. (U) Dubai-based Emirates airlines announced that it will 
begin flights to Tunis on October 29.  The company will 
serve Tunis five times a week, with several direct flights 
 
TUNIS 00002418  002 OF 002 
 
 
between Tunis and Dubai and other flights via Tripoli.  The 
opening of Emirates services in Tunisia is a sign of the 
growing bilateral economic interests between Tunisia and the 
UAE. (ref B).  Earlier this year, a GOT delegation to the 
UAE discussed investment opportunities with both corporate 
and government entities.  The bilateral talks are expected 
to facilitate investments by Dubai-based enterprises in the 
following sectors: seaports, tourism, communications, 
insurance, power generation, water desalination and oil 
refining. 
--------------------------------------------- 
Italy's Benetton invests in Tunisian Textiles 
--------------------------------------------- 
 
¶7. (U) According to local press, the Italian Benetton group 
plans to invest 28 million USD in a textile finishing 
factory to be built in Sahlin, a city on the Eastern coast 
of Tunisia.  In addition, the group announced a project in 
Kasserine, central-western Tunisia.  The project was 
presented by Tunisian Minister of Industry, Energy and Small 
Business, Afif Chelbi, after a meeting with a delegation of 
Benetton managers.  Benetton Tunisia is among the most 
important groups in the Tunisian textile sector, employing 
over 7,000 people and producing nearly 21 million pieces 
annually. 
 
¶8.  (SBU) Comment and Background: After the end of the 
quotas that existed under the Multifiber Agreement, the 
Tunisian textile sector has faced increased competition from 
Chinese textiles.  In order to promote continued investment 
and job creation in textiles, the GOT has granted favorable 
tax and customs concessions to foreign investors such as 
Benetton.  Textile production employs roughly 250,000 people 
and, according to official figures for 2005, the textile and 
apparel share in total exports is 32.6 percent.  End Comment 
and Background. 
 
--------------------------------------------- ----- 
Tunisie Telecom launches Mobile Internet and Email 
--------------------------------------------- ----- 
 
¶9. (U) Tunisie Telecom (TT) has launched two new services, 
internet and e-mail on mobile phones, aimed at increasing 
internet penetration in the country.  The new services, 
which were activated September 1 for all mobile phone 
subscribers, are Mobimail, which allows sending and 
receiving e-mails through the cell phones, and Mobinet, 
which provides full access to the Internet.  The phone 
company accompanied the launch of the new services with 
promotions for free connections until the end of November. 
 
¶10. (SBU) Comment and Background: The new services highlight 
the benefits of increased competition and privatization for 
Tunisian consumers (ref C).  Prior to the entrance of 
Tunisiana, Tunisia's only fully- private cellular operator, 
TT had a monopoly in the Tunisian telecom market.  Since 
entering the market in late 2002, Tunisiana has gained at 
least a 40 percent share of the Tunisian market for cellular 
phone service based on its lower prices, flexible 
subscription plans, and extra services.  TT's additional 
services and aggressive marketing follow the March 2006 
privatization of a 35 percent stake in TT by the UAE 
company, TECOM-DIG.  The GOT retains a 65 percent stake in 
TT.  End Comment and Background. 
BALLARD