A Special Advertising Section on Tunisia

Tunisia takes action to encourage foreign investment
Incentives aimed at attracting U.S. companies to Tunisian export sectors

Tunisians are hard workers and shrewd traders who want to do more business with the U.S. The Tunisian government has enacted attractive incentive programs to deepen the commercial relationship between the two countries. U.S. companies will find the Tunisian government particularly hospitable when it comes to investment in non-petroleum sectors that have export potential.

The Tunisian ministers and deputies, as well as the Tunisian business community, say that the American presence in Tunisia is weak outside of the petroleum sector.

That sentiment is supported by facts. U.S. investment today makes up only 16 percent of total foreign investment in Tunisia. Of the 1,668 foreign businesses represented in Tunisia, only 29 are American firms not involved in petroleum, according to the Foreign Investment Promotion Agency (FIPA).

Mohamed El Jeri, Tunisia's Minister of Finance, embodies the hearty Tunisian character. In the middle of the interview with The Washington Times, he left the room, received a flu shot, and resumed the interview without missing a beat.

Tunisia is the world's second-largest exporter of olive oil, and El Jeri enjoys sharing his vision of increased sales to the U.S.

"If every American consumes one gram of olive oil each day over the course of a year, sales of Tunisian olive oil will double," says El Jeri.

This may be wishful thinking, but there is an air of seriousness about Tunisian desires to increase trade and investment with the U.S. Doing more business with the U.S. has even become an important part of the country's national strategy.

According to Mohamed Ghannouchi, Minister of International Cooperation and Foreign Investment, government programs should help push the U.S. portion of total investment in Tunisia close to 20 percent by the year 2000.

Privatization of state companies in Tunisia - which began only a few years ago - has so far targeted only small companies to avoid major labor disruptions. Now, the government is attracting investors to the larger public companies. In 1997, for example, two large cement plants were privatized.

"Privatization took off slowly, now we are in a period of acceleration," explains Ghannouchi.

The Tunisian government is particularly keen on encouraging foreign investment in export-oriented industries.

The government screens potential foreign investment to regulate its impact on domestic competitors and employment, and to control foreign currency outflows. This should not worry potential investors, however. There is no evidence of discrimination against foreign investors either at the time of the initial investment or during operations, according to the U.S. Embassy in Tunis.

This past April, one American multinational, UT Automotive - a subsidiary of United Technologies Company - inaugurated a new factory outside of Tunis. Georges Messien, General Manager of this automotive cable harness plant, says that he is satisfied with his company's progress during the short time that it has been in operation. He also says that he enjoys living in Tunisia.

The Tunisian government provides substantial support and cooperation to create a positive environment to do business. Companies such as UTA enjoy complete exemption from import duties and taxes on all imported equipment, raw materials and semi-finished goods used in making export products. In addition, a Free Trade Accord between Tunisia and the EU now provides a cost-effective way for American companies to trade with Europe.

The Tunisian government has also incorporated training incentives into its support program for foreign companies. UTA has already received US $125,000 from the government to assist with the cost of training new employees. Under this subsidy program, the Tunisian government will assume up to 50 percent of costs up to US $240,000.

Tunisia's business climate is also enhanced by political stability in the country, partially explaining why economic growth has averaged 4.5% annually since 1992. It is also part of the reason Messien endorses Tunisia as a country in which to invest.

Meanwhile, El Jeri sees the U.S. as a good market to export Tunisian products. Either way, it makes good sense for the U.S. and Tunisia to form an even closer economic partnership.

For Additional Information on how to invest in Tunisia contact: The Office of the Foreign Promotion Agency at 31, Beekman Place, New York, NY 10022; tel: 212-751 1124 or Fax: 212- 752 1088; E-mail: fipany@ix.netcom.com.