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Tunisia Hosts Investors to Revive Post-revolution Economy

  • Reuters

Tunisia's Prime Minister Youssef Chahed, front right, walks with his French counterpart Manuel Valls, left, upon his arrival at Tunis airport in Tunis, Tunisia, Nov. 28, 2016.

Tunisia's Prime Minister Youssef Chahed, front right, walks with his French counterpart Manuel Valls, left, upon his arrival at Tunis airport in Tunis, Tunisia, Nov. 28, 2016.

Tunisia is hoping to reverse a decline in foreign investment and shake off some of its post-revolution economic malaise at an international conference that opens Tuesday.

The two-day event is aimed at drumming up interest in projects worth some $30 billion and boosting an economy hurt by militant attacks, labor unrest and political instability.

It comes as Prime Minister Youssef Chahed's government tries to contain a fresh wave of resistance against austerity measures demanded by international creditors.

"We have to revive hope among our youth," Chahed said before the conference, in which the government says representatives from at least 40 countries are expected to take part.

Tunisian President Beji Caid Essebsi, right, greets French Prime Minister Manuel Valls at the Presidential Palace in Carthage near Tunis, Tunisia, Nov. 28, 2016.

Tunisian President Beji Caid Essebsi, right, greets French Prime Minister Manuel Valls at the Presidential Palace in Carthage near Tunis, Tunisia, Nov. 28, 2016.

France and Qatar are the main foreign backers, with French Prime Minister Manuel Valls and the Emir of Qatar, Sheikh Tamim bin Hamad al-Thani, due to address the opening session.

Renewed support

After arriving in the capital, Tunis, Valls pledged fresh support.

"We will increase our financial assistance," Valls told reporters. He said Tunisia would be allowed to convert some debt into finances for new investments, but did not elaborate further.

Tunisia has been held up as the sole political success of the 2011 Arab Spring uprisings, but its democratic transition has been undermined by economic uncertainty and weak growth.

The government also faces a major challenge to provide economic opportunities to young people frustrated by high unemployment and a lack of development.

Some 500 foreign companies have left the North African country due to labor protests and security problems, including several militant attacks in 2015. New foreign investment fell to 2 billion dinars ($885 million) in 2015 from 3.5 billion dinars in 2010.

Chahed's administration, in place since August, points to a new investment law that it hopes will revive the flow of foreign capital by reducing bureaucracy, taxes on profits, and restrictions on transferring funds out of the country.

FILE - Unemployed protesters demonstrate in Tunis, Jan. 22, 2016.

FILE - Unemployed protesters demonstrate in Tunis, Jan. 22, 2016.

Financial park

The conference will make the case that with its political transition essentially completed, Tunisia now needs longer-term investments to develop industries and create jobs.

On Sunday, Chahed relaunched a $3 billion financial park and real estate development north of Tunis funded by Bahrain's Gulf Finance House, which had been suspended for five years. The project would create nearly 1,000 jobs in its first phase, he said, and showed that Tunisia was still "an attractive and competitive site for investors."

On Saturday, President Beji Caid Essebsi received a group of local businessmen who he said would launch 1.5 billion dinars ($650 million) worth of projects in Tunisia's poorest regions.

But protests against austerity measures included in the 2017 budget provide an awkward backdrop to the conference.

Tunisia's powerful UGTT union has threatened to hold a public sector general strike over plans to freeze wages, and various groups including lawyers, teachers and pharmacists are threatening to strike this week against new taxes.

Chahed said the budget was "the most controversial in the history of the country." But, he added, "we have had the courage to begin these reforms in order to balance our public finances."

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