The Investment Code, the outcome of the visit of Minister of Investment and International Cooperation in Turkey, the major projects reported in Tunisia and the new features of the next edition of the Carthage Forum were at the centre of the interview given by Tunisian Minister of Investment and Cooperation Riadh Bettaieb to AfricanManager.
How can you characterize the situation of foreign investment in Tunisia?
It is undergoing a profound transformation in all sectors. Fortunately for foreign investment, the Tunisian site has held up well. We have the same figures of 2010. We are now at only 1% down compared to the first four months of 2010. Tunisia remains a very attractive site for foreign investment.
To bring back foreign investors, Tunisia should face several challenges. What are the priorities?
As a first step, we must diversify our partners. The current level of trade with our European partners has reached about 80%. However, following the crisis in the Euro zone, we are called to further diversify our partners. This is a very important challenge, especially since we have the advantages and opportunities to open up on our Maghreb, Arab and African environment.
The rate of integration in the Maghreb varies from 2 to 3%. While the Arab one is estimated between 6% and 7%. These are the lowest figures in the world. With Europe, Tunisia records the highest integration rate, about 67%, hence the great opportunities for Tunisia to develop its trade with neighboring countries.
Is there a strategy implemented by your department to improve the investment climate in Tunisia?
We are, indeed, revising the strategy and mapping of investment to focus it on regional development. The investment code remains an important factor for foreign investors. We will focus on the business climate as the first criterion of choice for foreign investors seeking a climate of confidence and a healthy and transparent business climate.
We want a State that can protect the interests of all parties and arbitration institutions that do their job with integrity and speed. Fortunately, with the Revolution, Tunisia was able to provide this environment.
Our second axis revolves around the infrastructure. It also involves developing industrial zones and their competitiveness, providing them with logistics, road infrastructure, transport, telecommunications and services.
The port of Rades is currently facing several problems. Some delays were experienced in unloading ships. We are seeing, with the various ministries, how to solve this problem since it is also a very important criterion in terms of proximity and geographical positioning.
The third criterion sought by the investor is the human potential, skills, training centers and technicians. We are now multiplying our efforts to develop these specialties. In this context a major project is being developed. It involves the construction of marinas to develop parking and maintenance. In the automotive field, we are also trying to see how to attract automakers. We are currently reviewing our industrial base and preparing an entire file with the aim to develop some vocational training centers. In the field of aeronautics, a vocational training center will be built.
At a recent conference organized in Gammarth, a set of projects were presented to donors.
Which conclusions for the conference?
Many investors have already expressed interest in working on several projects in Tunisia. Many investors wanted for example to partner in the Sra Ouertane mining project and in several other projects in the fields of oil, ports, railways, renewable energy, building materials, cement and infrastructure. But we are currently reviewing many things at once.
For 2012, we have been able to meet all our financing needs. However, we are working on financing public projects which will be scheduled for 2013. With Arab funds, we got almost financing for projects with an overall budget of approximately $ 1.5 billion. These projects have been presented since last March. We are also negotiating with the Koreans and we came to agreement on two projects. On its part, China has expressed interest in financing 5 major infrastructure projects.
Following your recent visit to Turkey, which results can be drawn?
We have participated in several workshops on fight against corruption, good governance and the impact of the Arab Spring Revolution on balances in the Arab region. Business leaders and policy makers met to promote the site of Tunisia and attract funding for projects that required some 400 million dinars. For our part, we want it to be a direct support to the state budget. We’re talking with the Turkish side which has proposed an interest rate very encouraging of the order of 1.5%. Last week, Turkey has provided a grant of approximately $ 100 million. Through this visit we also agreed with the Turkish to work to improve the level of exchange between the two countries. Tunisia is currently making more than $ 1 billion in revenue but the balance is in deficit in favor of Turkey. Hence the need to find a balance.
We will probably try to reach agreements with Turkey in the field of agriculture and industry, to allow the marketing of our products in Turkey.
According to preliminary estimates, which are the main areas of cooperation between the two countries?
There were some projects that are in the phase of realization and a lot of projects in the field of building materials. There is also a Turkish investor who wants to work on a marble processing and export project. We are currently selecting to him three to four sites to settle in the South, Centre and North-West of Tunisia. Another investor wants to set up a plant to produce gypsum powder and gypsum tiles and plasterboard. The cost of this project exceeds 30 or 40 million dinars. There are also those who want to invest in agriculture, seeds, mainly of potatoes and a few other projects in agri-business.
Are there other investors who have expressed interest in Tunisia besides the Turks?
We have indeed recorded the presence of our traditional investors such as France, Germany, Belgium, Spain and Italy. There was a Dutch investor who wants to invest in a project on the use of thermal waters for the production of early vegetables in the regions of El Hamma.
This was reinforced by the successful experience of the Spanish company “5th season” in this area. The latter operates approximately 60 hectares in this region. This is a very interesting project in terms of product quality and productivity. It offers approximately 1,000 job positions. The same company is also looking for a new field to further develop its activities.
There were also French companies which are currently studying the possibility of setting up a tooling and turning factory in Tunisia. A major Maghreb high speed highway project will also be studied. Chinese companies showed interest for this project. We also received one of the largest infrastructure companies in the world and another in the field of railways. We also presented some project ideas in the field of Maghreb railways from the Algerian to the Libyan borders stretching over 850 km.
Regarding the Investment Code, at which level of revision are you? And what are the guidelines that will be reviewed?
Currently we are in the phase of defining an action plan. We have a lot of stakeholders in its review, whether at the government level or with the different representatives of ministries and agencies. We also note the participation of donors such as the OECD, EIB, IFC and several other institutions. We are very open to ensure the success of this code.
There is also a great job of consultation with the Tunisian private sector, particularly with the UTICA, UGTT, UTAP, joint chambers representing foreign investors and joint chambers of commerce. We also want to involve media representatives, corporate lawyers, associations, and members of the Constituent Assembly.
The investment code has to be simple and should be based on free enterprise through the establishment of an incentive system, based on new technologies, renewable energy, environmental projects and regional development. We want to take into account, as requested by the EIB, of fiscal incentives.
The EIB has recommended granting a single price of support to competitiveness. As for the OECD, it has proposed conducting a study on tax incentives in Tunisia. This is a great task! We want to do this job before the end of the current year and submit it later to the Constituent Assembly.