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Tunisia tries lining up deals after financial pledges at investment conference
December 1, 2016 / 1:36 AM / a year ago

Tunisia tries lining up deals after financial pledges at investment conference

TUNIS (Reuters) - Tunisia is seeking to firm up actual investment deals to go along with a series of pledges of financial support it has received at an international conference being held this week to energize it’s fragile economy.

The headquarters of the African Development Bank (AfDB) are pictured in Abidjan, Ivory Coast, September 16, 2016. Picture taken September 16, 2016. REUTERS/Luc Gnago

Officials say they have been lining up private and public sector deals for investment in infrastructure, renewable energy, new technology and tourism as they seek to reverse a decline in foreign investment since Tunisia’s 2011 uprising.

Industry minister Zied Ladhari told Reuters that new deals included investment by U.S. firm General Electric in a health care project, and a vehicle assembly plant planned by French automaker Peugeot .

Qatar’s Mejda Group signed a deal to develop a $220 million tourism complex, including a luxury hotel and a shopping center, just outside Tunis. The project is expected to create 1,500 jobs, with work to start in December, a senior Tunisian official said.

Tunisia has been lauded as the sole success story of the Arab Spring uprisings, winning praise for the democratic transition launched when former leader Zine El-Abidine Ben Ali was toppled five years ago.

But economic progress has been hampered by labor unrest, militant attacks, red tape and corruption. Growth is weak and unemployment high, especially among young people.

At least 500 foreign companies left after 2011, and new foreign investment fell to 2 billion dinars ($885 million) in 2015 from 3.5 billion dinars in 2010.

The government is now facing resistance from unions as it tries to pass austerity measures demanded by foreign creditors.

It recently passed a new investment law designed to reduce bureaucracy, taxes on profits and restrictions on transferring funds out of the country.

The Tunis conference, Tunisia 2020, has produced offers of billions of dollars in loans and aid, including major pledges from Qatar, the European Investment Bank and the Arab Fund for Economic and Social Development.

On Wednesday the African Development Bank (AFDB) added the latest pledge, announcing that it would lend Tunisia between 1.5 billion euros and 2 billion euros ($1.6 bln-$2.1 bln) over the next five years.

Ladhari said the conference had also shown that Tunisia was able to lure investors. “Tunisia has presented itself once again as a very attractive investment destination,” he said.

Writing by Aidan Lewis Editing by Jeremy Gaunt

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