Tunisia wins billion-dollar pledges for ailing economy

Tunisia won pledges of more than a billion dollars in financial support at an investment conference Tuesday aimed at reviving the country's struggling economy. Nearly six years after its Arab Spring revolution, Tunisia hopes the meeting will help it tackle challenges including high unemployment, low growth and a tourism sector hammered by jihadist attacks.
The two-day "Tunisia 2020" conference aims to put the North African nation "back on the investment map of the Mediterranean", officials said. "Tunisia faces exceptional circumstances and needs exceptional support," said President Beji Caid Essebsi. "The success of the democratic project in Tunisia... serves the interests of the region and can help strengthen security and stability regionally and globally," he said.
More than 2,000 business, finance and political leaders from 40 countries are attending the conference, including officials from global lenders such as the World Bank. The government is seeking bids on 140 ventures - from infrastructure and agricultural projects to hi-tech schemes - worth roughly $32 billion (30 billion euros). At the conference's opening session, Qatari Emir Sheikh Tamim bin Hamad Al-Thani pledged $1.25 billion (1.18 billion euros) to "support the Tunisian economy and strengthen its process of development".
Kuwait said it would lend Tunisia $500 million (470 million euros) over the next five years, while Canada and Algeria also pledged financial support. French Prime Minister Manuel Valls said the French Development Agency (AFD) would invest "at least 250 million euros ($265 million) every year" in Tunisia, a former French colony. That is on top of an aid package France announced last year to pump a billion euros ($1.06 billion) into Tunisia's economy by 2020. "We want to go further," Valls said, adding that France has "duty and a responsibility" to support Tunisia, and called on Europe to "live up to expectations".
The Tunisian government says the conference is part of a charm offensive aimed at attracting private sector investment to reinvigorate growth and create jobs. The meeting came as French auto giant PSA said on Tuesday it would open a factory in Tunisia to produce Peugeot pick-ups for the local market. PSA and its Tunisian partner Stafim said they will produce 1,200 vehicles a year from 2018.
But with around 15 percent of its workforce unemployed as of spring 2016, according to the World Bank, Tunisia needs much more investment in order to stave off social unrest. Many of its jobless are young graduates who have seen the hope of the Arab Spring dissipate. Prime Minister Youssef Chahed's government took office in August in place of an administration heavily criticised for its economic management. That followed a catastrophic 2015 in which attacks claimed by the Islamic State group killed 59 foreign visitors and 13 Tunisians.
The attacks dealt a devastating blow to the tourism industry, which in 2010 employed 400,000 people and represented 10 percent of Gross Domestic Product. Strikes and social unrest have also hit strategic sectors including phosphate mining. In January, Tunisia faced its biggest social unrest since the revolution. Chahed told AFP last week that Tunisia deserved support and that the international community "should invest in Tunisian democracy".
The International Monetary Fund approved a $2.9-billion loan to Tunisia in May to help implement economic and financial reforms. The European Union also announced a doubling of its financial support in 2017 to $318 million (300 million euros). Essebsi will head to Brussels on Wednesday and Thursday for an EU-Tunisia summit. Incoming UN Secretary General Antonio Guterres told Tuesday's conference that Tunisia had not yet received enough economic support. "The success of Tunisia requires a strong economy," he said. "For the private sector, investing in Tunisia is an intelligent decision."