Economy

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.

Tunisian economy has been grounded since the Jasmine Revolution (francesco sgroi)
Tunisian economy has been grounded since the Jasmine Revolution (francesco sgroi)
Marco Alfieri

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

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!
Geopolitics

Iran-Saudi Arabia Rivalry May Be Set To Ease, Or Get Much Worse

The Saudis may be awaiting the outcome of Iran's nuclear talks with the West, to see whether Tehran will moderate its regional policies, or lash out like never before.

Military parade in Tehran, Iran, on Oct. 3

-Analysis-

LONDON — The Iranian Foreign Ministry spokesman Saeed Khatibzadeh said earlier this month that Iranian and Saudi negotiators had so far had four rounds of "continuous" talks, though both sides had agreed to keep them private. The talks are to ease fraught relations between Iran's radical Shia regime and the Saudi kingdom, a key Western ally in the Middle East.

Iran's Foreign Minister Hossein Amirabdollahian has said that the talks were going in the right direction, while an Iranian trade official was recently hopeful these might even allow trade opportunities for Iranian businessmen in Saudi Arabia. As the broadcaster France 24 observed separately, it will take more than positive signals to heal a five-year-rift and decades of mutual suspicions.


Agence France-Presse news agency, meanwhile, has cited an unnamed French diplomat as saying that Saudi Arabia wants to end its costly discord with Tehran. The sides may already have agreed to reopen consular offices. For Saudi Arabia, the costs include its war on Iran-backed Houthis rebels fighting an UN-recognized government in next-door Yemen.

The role of the nuclear pact

Bilateral relations were severed in January 2016, after regime militiamen stormed the Saudi embassy in Tehran. Amirabdollahian was then the deputy foreign minister for Arab affairs. In 2019, he told the website Iranian Diplomacy that Saudi Arabia had taken measures vis-a-vis Iran's nuclear pact with the world powers.

It's unlikely Ali Khamenei will tolerate the Saudi kingdom's rising power in the region.

He said "the Saudis' insane conduct toward [the pact] led them to conclude that they must prevent [its implementation] in a peaceful environment ... I think the Saudis are quite deluded, and their delusion consists in thinking that Trump is an opportunity for them to place themselves on the path of conflict with the Islamic Republic while relying on Trump." He meant the administration led by the U.S. President Donald J.Trump, which was hostile to Iran's regime. This, he said, "is not how we view Saudi Arabia. I think Yemen should have been a big lesson for the Saudis."

The minister was effectively admitting the Houthis were the Islamic Republic's tool for getting back at Saudi Arabia.

Yet in the past two years, both sides have taken steps to improve relations, without firm results as yet. Nor is the situation likely to change this time.

Photo of Iranian Supreme Leader Ali Khamenei in 2020

Iranian Supreme Leader Ali Khamenei in 2020

commons.wikimedia.org

Riyadh's warming relations with Israel

Iran's former ambassador in Lebanon, Ahmad Dastmalchian, told the ILNA news agency in Tehran that Saudi Arabia is doing Israel's bidding in the region, and has "entrusted its national security, and life and death to Tel Aviv." Riyadh, he said, had been financing a good many "security and political projects in the region," or acting as a "logistical supplier."

The United States, said Dastmalchian, has "in turn tried to provide intelligence and security backing, while Israel has simply followed its own interests in all this."

Furthermore, it seems unlikely Iran's Supreme Leader Ali Khamenei will tolerate, even in this weak period of his leadership, the kingdom's rising power in the region and beyond, and especially its financial clout. He is usually disparaging when he speaks of Riyadh's princely rulers. In 2017, he compared them to "dairy cows," saying, "the idiots think that by giving money and aid, they can attract the goodwill of Islam's enemies."

Iranian regime officials are hopeful of moving toward better diplomatic ties and a reopening of embassies. Yet the balance of power between the sides began to change in Riyadh's favor years ago. For the kingdom's power has shifted from relying mostly on arms, to economic and political clout. The countries might have had peaceful relations before in considerably quieter, and more equitable, conditions than today's acute clash of interests.

If nuclear talks break down, Iran's regime may become more aggressive.

Beyond this, the Abraham Accord or reconciliation of Arab states and Israel has been possible thanks to the green light that the Saudis gave their regional partners, and it is a considerable political and ideological defeat for the Islamic Republic.

Assuming all Houthis follow Tehran's instructions — and they may not — improved ties may curb attacks on Saudi interests and aid its economy. Tehran will also benefit from no longer having to support them. Unlike Iran's regime, the Saudis are not pressed for cash or resources and could even offer the Houthis a better deal. Presently, they may consider it more convenient to keep the softer approach toward Tehran.

For if nuclear talks with the West break down, Iran's regime may become more aggressive, and as experience has shown, tensions often prompt a renewal of missile or drone attacks on the Saudis, on tankers and on foreign shipping. Riyadh must have a way of keeping the Tehran regime quiet, in a distinctly unquiet time.

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!
THE LATEST
FOCUS
TRENDING TOPICS
MOST READ