In keynote speeches to the half-day third Malta-Tunisia Business forum at MCCEI held on 5 February the Presidents of Malta and Tunisia urged stronger and more extensive economic links between the two nations.
Here for a two-day state visit, Tunisian President Beji Caid Essebi told senior business leaders that "we are looking for a long-term partnership based on common interests. Under our 2016-2020 Development Plan with job creation as a key priority, we aspire to increase foreign direct investment by 80%. Tunisia recently joined COMESA (the 20-nation Common Market for Eastern and Southern Africa) which has 500 million consumers".
According to President Marie-Louise Coleiro Preca: "Malta and Tunisia are united in their commitment to support entrepreneurs and the common Mediterranean heritage. We agreed on closer cooperation with the Mediterranean Tourism Foundation, which will host the sixth Mediterranean Tourism Forum next week, 14-15 February in St Julian's."
The previous day's 11th meeting of the Malta-Tunisia Joint Commission committed to enhance cooperation on trade and the economy, culture, tourism, town twinning, transport, vocational training and employment, higher education, research and innovation, health, agriculture and fisheries, as well as issues related to social welfare, such as countering gender-based violence, responding to early childhood development, and cooperation in the field of the elderly.
In the presence of the two heads of state, the respective ministers of foreign affairs signed the Agreed Minutes of the Commission meeting, an Agreement on Temporary Employment, a Memorandum of Understanding on Responding to the Development of Early Childhood, a Protocol of Cooperation in the Area of Seniors and a Programme of Cultural Cooperation for the years 2019-2021.
"MCCEI is committed to sustain and promote the excellent business relations between Malta and Tunisia," the Chamber's president Frank Farrugia told the Forum. "The third in a span of 14 months, this event is another clear testimony of the commitment to consolidate our healthy relationship and to provide tangible opportunities for our respective business communities. Our Chamber notes with pleasure the ongoing effort to facilitate and improve the attractiveness of Tunisia as a business location by reforms such as the announced one-stop-shop for investors."
"Our bilateral ties give us an incentive to engage and explore deeper reciprocal commercial cooperation in manufacturing, logistics, aviation, maritime, financial services, advisory and legal services, ICT and tourism sectors."
Samir Majoul, president of Tunisia's Business Federation UTICA (Union Tunisienne de l'Industrie, du Commerce et de l'Artisanat) appealed to both business communities "for Tunisian-Maltese economic cooperation to rise to the level of the excellent political relations and friendship between our two countries, as witnessed by the state visit. It is our duty to support Maltese businesses based in Tunisia while we should attract more investment from Malta, broadening our economic cooperation to new and promising sectors".
"Tunisia was the first south Mediterranean nation to sign an association agreement with EU in 1995 which led to the establishment of a free trade area as from January 2008. Tunisia also joined the Arab free trade area and has free trade agreements with a number of other Arab nations. Tunisia can act as a hub for mutually beneficial triangular partnerships for Maltese and Tunisian businesses in particular in Africa, thanks to our experience and good reputation there."
NSO trade statistics report Malta's exports to Tunisia reaching €51.9m in 2018, down from €74.3m in 2017, with imports at €34.3 and €31.7 in respective years.
Among Tunisia's many strong points were 52 double taxation agreements and 54 bilateral investment protection agreements, Thouraya Khayati, director of the Milan office of the Foreign Investment Promotion Agency told the Forum. The next Tunisia Investment Forum will be on 20-21 June in Tunis. Current foreign investments involved 3,460 foreign companies employing 376,470 people while 15 Maltese enterprises had so far invested €24m creating 2,063 jobs.
Tunisia's leading export sector is mechanical, electrical and electronic goods, while it is Africa's second largest automotive parts producer, she stated. Textiles is the second largest export sector with a growing aerospace activity currently involving 70 companies operating at a space park, Aerolia - an Airbus subsidiary.
Offshoring is also developing fast. Among Tunisia's many attractions is the annual output of 70,000 highly trained graduates from its 198 higher education and 1,000 vocational training centres, competitively low labour costs, 15 cyber parks, 100 industrial zones and a slew of foreign investment incentives, as well as a strong track record for producing competitive manufactured goods for export.
European Commission documents report that Tunisia, an EU Privileged Partner since 2012, has received €1.6bn in EU grants and €800m in macro-financial assistance following the overthrow of President Ben Ali in 2011, with an indicative allocation of €504m to €616m foreseen for 2017-2020.
Ongoing negotiations for a Deep and Comprehensive Free Trade Area were launched in October 2015. The DCFTA would create new trade and investment opportunities, bring about the better integration of Tunisia's economy into EU's single market, support ongoing economic reforms and bring its trade-related legislation closer. In 2017, 75% of Tunisia's exports went to the EU, the source of 50% of its imports.
The April 2018 European External Actions Service annual report on Tunisia states that unemployment - at 15.5% of the labour force in 2017 with youth accounting for 70% - is the nation's most urgent short- and medium-term challenge, as evidenced by the growing number of demonstrations. An improved business environment and reduction of administrative constraints is essential to relaunch private investment and generate growth and jobs, the report indicates.
In 2016, Tunisia contracted a massive $2.9bn four-year loan from the International Monetary Fund. IMF's May 2018 end-of-mission report on Tunisia said that "the economy showed signs of recovery in the first quarter of 2018, with the highest growth since 2014 supported by agriculture and exports but risks to macroeconomic stability, especially inflation, have increased and require a decisive response, complemented with measures to protect the poor. Inflation reached 7.7% (year-on-year) in April, the highest level since 1991. Monetary and credit aggregates continue to grow rapidly and will put additional upward pressure on prices in the months ahead. Foreign exchange reserve coverage of imports has declined further".
The IMF loan and its stringent conditions as well as inflation and the impact of the 40% depreciation in the dinar in the last 12 months have sparked massive public criticism and demands for wage increases, becoming the key focus of the nationwide strike on 17 January called by the powerful national trade union UGTT (Union Generale Tunisienne des Travailleurs) and casting a shadow over the next presidential and legislative elections in autumn.