VZCZCXYZ0000
PP RUEHWEB

DE RUEHTU #0293/01 1351014
ZNR UUUUU ZZH
P 151014Z MAY 09
FM AMEMBASSY TUNIS
TO RUEHC/SECSTATE WASHDC PRIORITY 6288
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUCNMGH/MAGHREB COLLECTIVE

UNCLAS TUNIS 000293 
 
SENSITVE 
SIPDIS 
 
STATE FOR EEB/CBA (WINSTEAD AND GILMAN, AND 
NEA/MAG (PATTERSON AND HAYES) 
STATE PASS USTR (BURKHEAD) AND USAID (MCCLOUD) 
USDOC FOR ITA/MAC/ONE (MASON), ADVOCACY CTR (TABINE), AND CLDP 
(TEJTEL AND MCMANUS) 
CASABLANCA FOR FCS (ORTIZ) 
CAIRO FOR FINANCIAL ATTACHE (SEVERENS) 
LONDON AND PARIS FOR NEA WATCHER 
 
E.O. 12958: N/A 
TAGS: ECON ETRD EINV ETTC EMIN TS
SUBJECT: TUNISIA: ECONOMIC HIGHLIGHTS 
 
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Summary 
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¶1. (U) This cable contains highlights of recent economic 
developments in Tunisia on the following topics: 
 
¶A. Economic Crisis Affecting Exports 
¶B. Foreign Investment Down 45 Percent 
¶C. Online Travel Booking System By 2010 
¶D. Brokers Create Guarantee Fund For Non-Commercial Risks 
¶E. Low Inflation Rate Despite Rising Consumer Basket 
 
--------------------------------------------- 
Economic Crisis Appears Restricted To Exports 
--------------------------------------------- 
 
¶2. (U)  On April 30, Tunisia's Central Bank Governor Taoufik Baccar 
gave a press conference reviewing recent indicators on the impact of 
the global financial crisis on the national economy.  He said that 
the negative effects were concentrated on the export sector so far, 
especially raw materials and some primary industries.  Over the 
first four months of 2009, total exports fell 19.7 percent, energy 
exports dropped by 50 percent and phosphate and byproducts 54 
percent.  (COMMENT:  Baccar did not specify whether these figures 
were volume or value of exports, though the figures are likely 
referring to value.  End Comment.)  The decline, he said, is as a 
result of a downward trend in world prices for these products.  In 
addition, he noted olive oil exports fell by 52 percent, mechanical 
and electrical industries 15.7 percent and textile-clothing products 
16 percent. 
 
¶3. (SBU)  Baccar said that Tunisia's macroeconomic balance sheet is 
under control.  The current deficit is currently 0.4 percent, down 
from 0.6 percent last year.  The inflation rate reached 3.2 percent 
in April, down from 5.8 percent in 2008.  According to Baccar, 
tourism sector revenues rose 3.6 percent and Tunisian expatriates' 
remittances rose 8.3 percent year-on-year.  However, according to 
the Central Bank, the Tunisian Dinar also depreciated six percent 
relative to the US dollar year-on-year for April.  According to a 
financial analyst we know, it is likely remittance receipts are 
actually negative. 
 
¶4. (U)  The banking sector did well in 2008 and over the first 
quarter of 2009, according to Baccar.  Banks' own funds rose by 500 
million TND, non-performing loans rate declined to 15.2 percent, 
down from 17.3 in 2007, which allowed the coverage of classified 
debts by resources to reach 57.5 percent.  He added that planned 
reforms are continuing and that the coming merger of three Tunisian 
and Libyan banks is expected to result in a regional banking hub. 
 
---------------------------------- 
Foreign Investment Down 45 Percent 
---------------------------------- 
 
¶5. (U) According to the Tunisian Foreign Investment Promotion Agency 
(FIPA), total foreign investment decreased 45 percent over the first 
quarter of 2009 compared to the same period last year (TND 408.6 
million (US $289.7 million), down from TND 742.7 million (US $609.01 
million)). Foreign direct investment decreased 43.6 percent, TND 
401.2 million (US $284.45 million) down from TND 710.9 million (US 
$582.94 million), and investment in portfolio fell 76.7 percent, TND 
7.4 million (roughly US $5.25 million) down from TND 31.8 million 
(approximately US $26 million).  Over the mentioned period of 2009, 
most FDI was in the energy sector, TND 280 million (US $198.52 
million), followed by manufacturing, TND 92 million (US $65.228 
million), tourism, TND 19 million (US $13.471 million), services TND 
8 million (US $5.672 million) and agriculture TND 2 million (USD 
1.418 million).  The target set by FIPA for 2009 is TND 2 billion 
(US $1.418 billion) total FDI. (Comment: this very optimistic target 
likely takes into account some large rumored projects which may come 
about in 2009-2010 - Emirati construction of a sports city and a 
Czech-funded Sea World complex.  End comment.) 
 
--------------------------------------------- -------- 
GOT To Implement Online Travel Booking System By 2010 
--------------------------------------------- -------- 
 
¶6. (U)  The Tunisian Tourism Ministry will partner with a private 
investor to set up online services for travelers so they can 
research, plan, and book their travel through a web portal.  The 
project was announced by Minister of Tourism Laajimi on April 30 
during the 37th annual meeting of the National Tunisian Tourism 
Office representatives abroad.  Laajimi said that Tunisia will be 
able to benefit from its own network and will no longer be dependent 
on international tour operators such as the British company Thomas 
Cook or the German company TUI, which, he added, brought little to 
Tunisia and "whose only motivation is money."  Laajimi accused 
Thomas Cook of eliminating several of its services in Tunisia in 
favor of other destinations. The British Ambassador told Emboffs 
earlier this year that British tourism was down 70 percent. 
 
¶7. (U)  Tourism statistics for the first four months of 2009 are 
satisfying, according to Laajimi.  He said approximately 1.654 
million tourists have visited Tunisia, a figure that represents a 
2.2 percent increase compared to the same period in 2008.  Revenues 
reached the equivalent of US $578.151 million, an increase of 2.3 
percent regarding earnings in hard currencies.  Hotel occupancy 
decreased by 3.2 percent, however.  Laajimi said this decrease was a 
consequence of measures put in place to attract higher income (and 
higher spending) tourists.  The Deputy Tourism Minister said during 
the opening of a tourism fair on May 14 that the sector would be an 
important source of foreign revenue that would offset losses in 
other parts of the economy.  He said Tunisia has profited from 
last-minute bookings, as European tourists have been choosing the 
Mediterranean as a preferred destination, rather than going further 
afield.  (Comment: While we have no reason to doubt that tourism 
figures are up so far this year, the numbers probably represent 
Algerian and Libyan tourists.  Algerians are known to avoid hotels 
in favor of apartments.  The real test for Tunisia's tourism 
industry will come in the peak summer months, when European visitors 
usually descend on Tunisia's beach resorts.  End Comment). 
 
--------------------------------------------- --------- 
Brokers Create Guarantee Fund for Non-Commercial Risks 
--------------------------------------------- --------- 
 
¶8. (U)  On May 7, the quasi-official Tunis-Afrique Press Agency 
(TAP) announced the creation of a guarantee fund against 
non-commercial risks by Tunis Stock Exchange (BVMT) broker company 
members.  The main objectives of the fund are limited protection 
against loss in the event of broker bankruptcy.  If a broker fails 
to honor the settlement commitment, the fund promises to fulfill the 
commitment toward the investor and complete all settlements without 
disruption.  To supply the fund, the BVMT will levy a five percent 
charge on stock trades, and each broker member will contribute one 
thousand dinars (US $709) annually.  In the event of loss, investors 
would receive partial compensation, regardless of accounts owned, 
equivalent to a maximum of US $21,000 or 90 percent of the 
settlement value.  TAP noted this model was based on the French 
system. 
 
--------------------------------------------- ---- 
Low Inflation Rate Despite Rising Consumer Basket 
--------------------------------------------- ---- 
 
¶9. (U)  According to the National Statistics Institute (INS), 
inflation reached 3.2 percent in April 2009, down from 5.2 percent 
recorded the same month last year.  This decrease is largely due to 
the downward trend in international energy and commodity prices. 
However, a recent survey from the National Observatory of Supply and 
Prices (ONAP), under the Ministry of Commerce, showed that consumer 
basket prices rose 10.8 percent over the first quarter of 2009, 
compared to the same period last year, and 17.3 percent compared to 
¶2006.  Most significant increases by group of products were canned 
food (22.3 percent), spices (10 percent), and body care (5.1 
percent). On the other hand, edible oil prices decreased 18 percent, 
chocolate 11 percent and detergent 6 percent.  The survey noted that 
prices were 20 percent higher in small shops than in supermarkets. 
The ONAP explains that its survey is based on 705 items of current 
consumption available in supermarkets and retail points. 
 
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Comment 
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¶10. (U) The GOT has made some public acknowledgements of the effect 
of the economic crisis on Tunisia, all of them measured and denoting 
limited effects.  While true that Tunisia is not experiencing a 
rapid, large-scale contraction of the economy, there are significant 
signs of an economy affected by the recession in its largest trading 
partner, the European Union.  In addition, it is too early to 
evaluate the toll on tourism, which may only be felt in the peak 
season (June-August).  Post will be following and reporting on the 
tourism sector this summer.  We expect the true extent of the crisis 
to remain under-reported in the media and by GOT officials.  By the 
same token, reporting statistics on remittances without taking into 
account currency depreciation, has helped mask some relatively bleak 
numbers.  End Comment. 
 
GODEC