VZCZCXYZ0501
PP RUEHWEB

DE RUEHTU #0020/01 0131727
ZNR UUUUU ZZH
P 131727Z JAN 10
FM AMEMBASSY TUNIS
TO RUEHC/SECSTATE WASHDC PRIORITY 7136
INFO RUCNMGH/MAGHREB COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS TUNIS 000020 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EEB/IFD/OMA, EEB/EPPD, AND NEA/MAG 
STATE PASS USTR (BURKHEAD) AND USAID (MCCLOUD) 
USDOC FOR ITA/MAC/ONE (MASON) 
CASABLANCA FOR FCS (KITSON) 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EINV ETRD TS
SUBJECT: AMBASSADOR'S VISIT TO BIZERTE: ECONOMIC RESILIENCE 
AND OPTIMISM 
 
REF: 09 TUNIS 517 
 
Sensitive but unclassified; please protect accordingly. 
 
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Summary 
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¶1. (SBU) The Ambassador paid a courtesy call on an American 
auto components manufacturing plant, the president of a 
government-run business park, and business leaders in Bizerte 
on January 12.  The discussions centered on the effects of 
the economic crisis, the state of foreign investment, and 
perceptions of the United States.  Overall, the companies 
reported minor setbacks at the beginning of the crisis in 
early 2009 and a bounce back and recovery by the end of that 
year.  In fact, the Parc d'Activites Economiques de Bizerte 
(Bizerte Economic Activity Park) reported a significant 
increase in foreign investment in 2009.  The reasons for this 
resilience, according to the private sector representatives, 
is that Tunisia has captured business displaced from larger 
markets.  End summary. 
 
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Visit to ACT/CASCO 
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¶2. (SBU)  The Ambassador paid a courtesy call on Automotive 
Components Tunisia, a subsidiary of Casco Global, a 
U.S.-based mechanical components manufacturer.  ACT/Casco is 
the world market leader in cigarette lighters, USB ports and 
a range of sensors, which they sell to European and American 
car manufacturers.  Their factory in Tunisia is their largest 
worldwide operation, with over 300 employees and over 20 
billion euros in revenue for 2009.  ACT/Casco has been 
operational in Tunisia since 2002 under the offshore, 
export-only model.  It is located in the Menzel Bourguiba 
Bizerte Economic Activity Park, part of the larger Bizerte 
Economic Activity Park. 
 
¶3. (SBU)  Beji Beligh, ACT/CASCO Tunisia's General Manager, 
noted sales had slumped in February 2009 due to the crisis, 
but that they had bounced back robustly and helped the 
company achieve overall growth in 2009.  The reason for this 
was both displaced production from more expensive ACT/Casco 
locations in Europe, which were forced to downsize, and an 
increase in European government programs designed to promote 
car purchases. 
 
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A GOT-funded Business Park 
-------------------------- 
 
¶4. (SBU) The Ambassador called on Kamel Belkahia, President 
of the Parc D'Activites Economiques de Bizerte (Bizerte 
Economic Activity Park), the free trade zone where ACT/Casco 
and other American offshore companies are operating.  The 
park, divided into three parcels totaling over 80 hectares of 
land, houses mostly manufacturing enterprises and some 
service providers and employs over 5,500 people.  Near the 
port of Bizerte, the park alone is responsible for 2.2 
percent of Tunisia's total exports (over $388 million) and 30 
percent of the exports for the Governorate of Bizerte. 
Belkahia, who is a former mayor of Bizerte and headed its 
Chamber of Commerce, told the Ambassador he was moving on 
from the Park this year to head up a new Government of 
Tunisia (GOT) initiative, an agriculture-focused technopole 
which would have 60-80 percent private capital, and  include 
a research and development (R & D) component and an 
entrepreneurship center. 
 
¶5. (SBU) Belkahia noted the effect of the economic crisis on 
the Park, whose economic slump mirrored the national average 
of 15-20 percent reduction in exports.  Textiles and plastics 
had resisted the crisis, he said, but some companies, like an 
Italian pleasure boat manufacturer, had taken a harder hit. 
Belkahia referenced the GOT's assistance to struggling 
companies in 2009, and said it would continue in 2010. 
Investment, surprisingly, had actually increased over 2009 ) 
seven new companies joined the park and created enough 
employment to offset crisis-related job losses. 
 
¶6. (SBU) When the discussion moved to bilateral commercial 
relations, Belkahia said the onus was on Tunisia to promote 
itself as an investment climate and to seek partners for R & 
 
D initiatives such as the agricultural technopole. 
Currently, many of these institutions have linkages with 
European counterparts due to geographical proximity, but 
Tunisia does not know much about these activities in the 
United States.  He added that the youth in Bizerte were 
dynamic, and had new approach to collaboration with foreign 
counterparts, and that both countries should seize upon this. 
 
 
--------------------------------------------- ---- 
Business Leaders on Economic and Political Issues 
--------------------------------------------- ---- 
 
¶7.  (SBU) The Ambassador met with prominent Bizerte business 
leaders and heard their opinions on bilateral relations, the 
regional business climate, and the effects of the economic 
crisis.  In attendance were Ali Belakhoua (dual 
Tunisian-American citizen, Ruling Constitutional Democratic 
Rally (RCD) member, and owner of an electronics component 
factory), Imed Ouardi (owner of an IT company and RCD 
member), and Jalel Zaghouani (Operations Coordinator for 
Pioneer Natural Resources, an American oil company).  All 
attendees agreed the image of the United States in Tunisia 
was quite positive, even a year on from the inauguration of 
President Obama.  However, they noted most Tunisians did not 
look to the U.S. market, especially because of a lack of 
outreach and visible U.S. investments in Tunisia. 
 
¶8. (SBU) Ali Belakhoua told the Ambassador about a trip he 
took last year to a meeting of businessmen in the Maghreb, 
where the topic of discussion had been Maghreb integration. 
Aside from the language barrier at the meeting (which was 
conducted in French, prompting criticism from the Libyans), 
he described the climate as positive but indicated serious 
non-political barriers to trade existed.  Belakhoua and 
Ouardi agreed that Tunisian businessmen were afraid to go to 
Libya and Algeria because of the banking system, and rumors 
that companies had gone bankrupt waiting for payment from 
Libyan or Algerian counterparts.  On the IT sector, Ouardi 
said the Tunisian market would remain small despite 
liberalization, and that Tunisia needed to reach outwards to 
grow.  He added that Tunisia's biggest export should be human 
capital. 
 
¶9. (SBU) The economic crisis did not seriously affect 
Belakhoua's, Ouardi's, or Zaghouani's companies.  In fact, 
participants agreed that the average Tunisian had not been 
affected by the economic crisis in their day-to-day life.  A 
bigger crisis, they said, was Tunisia not getting into the 
World Cup.  Belakhoua, whose name was put forward as a 
candidate for the National Soccer Federation (reftel), added 
that soccer continues to be an important proxy for politics 
in Tunisia, and added he had heard rumors the United States 
national team was possibly coming to Tunisia for a friendly 
match in the lead up to South Africa.  (Note:  We checked 
with the National Soccer Federation and the rumor is not 
true.  Rather, the U.S. team was entertaining the idea of 
inviting Tunisia to play in the U.S., but the Federation now 
believes this posibility is highly unlikely.  End note.) 
 
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Comment 
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¶10. (SBU) The trip to Bizerte provided an opportunity to 
reach out to important business leaders of the region and to 
discuss bilateral commercial issues with an 
investment-promotion arm of the GOT.  Although a large 
portion of Bizerte's economy is auto and electrical component 
manufacturing (one of the hardest hit export sectors), the 
economic crisis's effects are not overtly visible there.  New 
investment seems to have offset any job loss due to the 
nationwide export slump.  The GOT is optimistic about growth 
for 2010, and if Bizerte's realities in late 2009 have been 
any indication, the optimism may be well-founded.  End 
comment. 
GRAY