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Cablegate: Tunisia Economic Highlights: Feb. 1 - Feb. 15

VZCZCXRO7870
PP RUEHTRO
DE RUEHTU #0263/01 0571509
ZNR UUUUU ZZH
P 261509Z FEB 07
FM AMEMBASSY TUNIS
TO RUEHC/SECSTATE WASHDC PRIORITY 2779
INFO RUEHAD/AMEMBASSY ABU DHABI PRIORITY 0864
RUEHAS/AMEMBASSY ALGIERS PRIORITY 7431
RUEHLO/AMEMBASSY LONDON PRIORITY 1276
RUEHNK/AMEMBASSY NOUAKCHOTT PRIORITY 0865
RUEHFR/AMEMBASSY PARIS PRIORITY 1739
RUEHRB/AMEMBASSY RABAT PRIORITY 8340
RUEHTRO/AMEMBASSY TRIPOLI PRIORITY 0063
RUEHCL/AMCONSUL CASABLANCA PRIORITY 4070
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 TUNIS 000263

SIPDIS

SENSITIVE
SIPDIS

STATE FOR NEA/MAG (HOPKINS AND HARRIS)
STATE PASS USTR (BELL), USPTO (ADLIN AND ADAMS), USAID (MCCLOUD)
USDOC FOR ITA/MAC/ONE (NATHAN MASON), ADVOCACY CTR (JAMES), AND CLDP
(TEJTEL)
CASABLANCA FOR FCS (ORTIZ)
LONDON AND PARIS FOR NEA WATCHER
RABAT FOR FAS (FAY)

E.O. 12958: N/A
TAGS: ECON ETRD EAGR EFIN KFLU ELAB TS
SUBJECT: TUNISIA ECONOMIC HIGHLIGHTS: Feb. 1 - Feb. 15

REF: A. TUNIS 143
B. 06 TUNIS 2749

1. (U) This cable contains highlights of recent economic
developments in Tunisia on the following topics:

A. AMU Considers Creation of Maghreb Debit Card
B. GOT to Hire 12,000 Employees
C. Avian Influenza: Tunisia Suspends Poultry Imports From Affected
Countries

--------------------------------------------
AMU Considers Creation of Maghreb Debit Card
--------------------------------------------

2. (U) On February 8 and 9, representatives from Arab Maghreb Union
(AMU) countries met in Tunisia to discuss harmonizing monetary
regulations and, more specifically, the creation of a Maghreb debit
card. Currently, 5 million bank cards are in use in the five AMU
countries and due to non-convertibility of currencies, debit cards
are not always honored outside the country in which they are issued.
To promote Maghreb financial integration, the AMU goal is for
Maghreb countries to double the number of cards in circulation -- to
10 million -- by 2010.

3. (SBU) Comment and Background: The increased use of credit cards
in Tunisia reflects growth in the commercial banking sector.
According to the Arab Tunisian Bank (ATB), there are roughly 1.1
million bank cards currently in use in Tunisia, a 15 percent
increase over 2005 figures.
While this has facilitated a limited expansion in e-commerce, the
non-convertibility of the Tunisian dinar continues to limit
Tunisians' ability to make purchases outside Tunisia, including in
AMU countries. The GOT's recent decision to create a credit card
("carte allocation touristique") for use outside of Tunisia (Ref B)
and to raise the yearly foreign exchange allowance will permit
Tunisians a greater degree of flexibility in spending money while
abroad. In addition, the upcoming implementation of reciprocal
convertibility between Libyan and Tunisian dinars will facilitate
economic integration between the two countries (Ref A). The
development of a bank card for use throughout the Maghreb would be a
welcome step to facilitate commerce, though it remains to be seen
how this will impact currency convertibility between the countries.
End Comment and Background.

----------------------------
GOT to Hire 12,000 Employees
----------------------------

4. (U) On February 13, the Minister of Civil Service and
Administrative Development announced that the GOT will hire 12,000
employees in 2007 (a number corresponding to about 70 percent of
this year's university graduates). Half of the new jobs will be
created in the Ministries of Education and Training, Higher
Education and Scientific Research.

5. (SBU) Comment: Lowering the unemployment rate and creating jobs
for new graduates is a key priority for the GOT. Although the
official unemployment rate is 14.2 percent, unemployment among
university graduates is significantly higher. Creating jobs through
public sector hiring provides a temporary solution that will not
address the underlying issues behind Tunisia's high unemployment
rate. Rather than stimulate private sector growth through economic
reforms, the GOT has chosen to remain the employer of last resort.
End Comment.

-----------------------------------------
Avian Influenza: Tunisia Suspends Poultry
Imports from Affected Countries
-----------------------------------------

8. (U) On February 11, the National Avian Flu Commission decided to
suspend import of poultry and poultry products from Hungary, United
Kingdom, Egypt and Nigeria -- countries recently reporting H5N1

TUNIS 00000263 002 OF 002


cases.

9. (U) Comment and Background: This is not the first time the GOT
has suspended poultry imports in response to avian influenza (AI).
The GOT took similar measures in late 2005 following AI outbreaks in
Europe and several African countries. Tunisia relies on imported
poultry stock (one-day chicks and hatchery eggs) -- mainly from
Europe-- to sustain the domestic poultry sector. End Comment and
Background.
GODEC

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