About the CBI

September 2005
Background Note: Tunisia

Flag: Red star on a red crescent in a white circle centered on a red
background.

PROFILE

OFFICIAL NAME:
Tunisian Republic

Geography
Area: 163,610 sq. km. (63,378 sq. mi.), slightly smaller than Missouri.
Cities: Capital--Tunis; Greater Tunis urban area: pop. 2,255,900 (includes
Tunis, Ariana, Ben Arous, and Manouba governorates) Sfax (pop. 858,300).
Terrain: Arable land in north and along central coast; south is mostly
semiarid or desert.
Climate: Hot, dry summers and mild, rainy winters.

People
Nationality: Noun and adjective--Tunisian(s).
Population (2004): 9,941,000.
Annual growth rate (2003): 1.03%.
Ethnic groups: Arab-Berber 98%, European 1%, other 1%.
Religions: Muslim 98%, Christian 1%, Jewish less than 1%.
Languages: Arabic (official), French.
Education: Years compulsory--9. Literacy--77.1% (male 85.2%; female 69%).
Health (2003): Infant mortality rate--21.1/1,000. Life expectancy--71.1 years
male, 75.1 years female.
Work force (2004, 3.33 million) Services--49.4%; industry--34.3%; agriculture
--16.3%.

Government
Type: Republic.
Constitution: June 1, 1959; amended July 12, 1988, June 29, 1999, and June 1,
2002.
Independence: March 20, 1956.
Branches: Executive--chief of state President Zine El Abidine BEN ALI (since
November 7, 1987) head of government, Prime Minister Mohamed GHANNOUCHI
(since November 17, 1999) cabinet, Council of Ministers appointed by the
president; president elected by popular vote for a 5-year term; election last
held October 24, 2004 (next to be held in October 2009); prime minister
appointed by the president. Election results: President Zine El Abidine BEN
ALI reelected for a fourth term; candidates from opposition: Mohamed Bouchiha
(PUP), Mohamed Ali Halouani (Et-tajdid) and Mounir Beji (PSL); percent of
vote--Zine El Abidine BEN ALI 94.49% (officially).
Legislative--bicameral. Chamber of Deputies or Majlis al-Nuwaab (189 seats;
5-year terms; 152 seats are elected by popular vote for party lists on a
winner-take-all basis). An additional 37 seats (20% of the total) are
distributed to opposition parties on a proportional basis as provided for in
1999 constitutional amendments. Elections last held October 24, 2004 (next to
be held in October 2009). Election results: percent of vote by party--RCD
92%; seats by party--RCD 152, MDS 14, PUP 11, UDU 7, Et-tajdid 3, PSL 2.
Note: The opposition increased number of seats from 34 to 37. A referendum in
2002 created a second chamber, the Chamber of Advisors. Elections for the
Chamber of Advisors were held in July 2005.
Judicial--independent District Courts, Courts of Appeal, Highest Court (Cour
de Cassation). Judges of the Highest Court are appointed by the President.
Political parties: Et-tajdid Movement (Mohamed Harmel); Constitutional
Democratic Rally Party (Rassemblement Constitutionnel Democratique) or RCD,
President Zine El Abidine BEN ALI (official ruling party); Democratic Forum
for Labor and Liberties or FDTL (Mustapha Ben Jaafar); Social Democratic
Liberal Party or PSDL (Mounir Beji); Movement of Democratic Socialists or MDS
(Ismail Boulahia); Popular Unity Party or PUP (Mohamed Bouchiha); Unionist
Democratic Union or UDU (Ahmed Inoubli); Democratic Progressive Party or PDP
(Nejib Chebbi).
Political pressure groups and leaders: Legal--Tunisian Human Rights League or
LTDH (Mokhtar Trifi). Outlawed--An-Nahda (Renaissance) the Islamic
fundamentalist party (Rached El Ghanouchi); National Council for Liberties in
Tunisia or CNLT (Sihem Ben Sedrine); Congress for the Republic or CPR (Moncef
Marzouki); Tunisian Communist Labor Party or POCT (Hamma Hammami); Tunisian
Green Party or PVT (Abdelkader Zitouni).
Administrative divisions: 24 governorates--Ariana, Beja, Ben Arous, Bizerte,
El Kef, Gabes, Gafsa, Jendouba, Kairouan, Kasserine, Kebili, Mahdia, Manouba,
Medenine, Monastir, Nabeul, Sfax, Sidi Bou Zid, Siliana, Sousse, Tataouine,
Tozeur, Tunis, Zaghouan.
Suffrage: Universal at 20. (Active duty members of the military cannot vote.)

Economy
GDP (2004): $16.2 billion (constant price of 1990).
Growth rate (2004): 5.8%.
Per capita current GDP (2004): $2,667.
Natural resources: crude oil, gas, phosphates, iron ore, lead, zinc, salt.
Agriculture (12.9% of GDP): Products--olives, beets, dates, oranges, almonds,
grain, sugar.
Industry (28.3% of GDP): Types--petroleum, mining (particularly phosphate),
textiles, footwear, food processing.
Services (38.6% of GDP): Tourism, commerce, transport, communications.
Trade (2004): Exports--$9.5 billion: hydrocarbons, agricultural products,
phosphates, chemicals, textiles, mechanical, electric components. By
region--Africa 6.8%, Americas 2.1%, Asia 3.1%, Europe 84.8%. By country
(U.S.$ million)--France $3145.1, Italy $2407.2, Germany, $871.9, Belgium,
$283.9, Libya, $341.2, U.S. $113.2, Spain $575.4. Imports ($10.7 billion)
--industrial goods and equipment, hydrocarbons, food, consumer goods. By
region--Africa 5.4%, Americas 6.0% Asia 9.5%, Europe 78.5%. By country (U.S.$
million)--France $3138.3, Italy $2375.4, Germany $1056.6, Belgium $351.0,
Libya $415.7, U.S. $351.6, Spain $662.0.
Trade balance deficit (2004): $3 billion.

PEOPLE
Modern Tunisians are the descendents of indigenous Berbers and of people from
numerous civilizations that have invaded, migrated to, and been assimilated
into the population over the millennia. Recorded history in Tunisia begins
with the arrival of Phoenicians, who founded Carthage and other North African
settlements in the 8th century B.C. Carthage became a major sea power,
clashing with Rome for control of the Mediterranean until it was defeated and
captured by the Romans in 146 B.C. The Romans ruled and settled in North
Africa until the 5th century when the Roman Empire fell and Tunisia was
invaded by European tribes, including the Vandals. The Muslim conquest in the
7th century transformed Tunisia and the make-up of its population, with
subsequent waves of migration from around the Arab and Ottoman world,
including significant numbers of Spanish Moors and Jews at the end of the
15th century. Tunisia became a center of Arab culture and learning and was
assimilated into the Turkish Ottoman Empire in the 16th century. It was a
French protectorate from 1881 until independence in 1956, and retains close
political, economic, and cultural ties with France.

Nearly all Tunisians (98% of the population) are Muslim. There has been a
Jewish population on the southern island of Djerba for 2000 years, and there
remains a small Jewish population in Tunis, which is descended from those who
fled Spain in the late 15th century. There is no indigenous Christian
population. Small nomadic indigenous minorities have been mostly assimilated
into the larger population.

GOVERNMENT AND POLITICAL CONDITIONS
Tunisia is a republic with a strong presidential system dominated by a single
political party. President Zine El Abidine Ben Ali has been in office since
1987 when he deposed Habib Bourguiba, who had been President since Tunisia's
independence from France in 1956. The ruling party, the Constitutional
Democratic Rally (RCD), was the sole legal party for 25 years--when it was
known as the Socialist Destourian Party (PSD)--and still dominates political
life. The President is elected to 5-year terms--with virtually no
opposition--and appoints a Prime Minister and cabinet, who play a strong role
in the execution of policy. Regional governors and local administrators are
also appointed by the central government; largely consultative mayors and
municipal councils are elected. There is a bicameral legislative body. The
Chamber of Deputies has 189 seats, 20% of which are reserved for the
opposition. It plays a growing role as an arena for debate on national policy
but never originates legislation and virtually always passes bills presented
by the executive with only minor changes. A referendum in 2002 created a
second chamber, the Chamber of Advisors. Elections for the Chamber of
Advisors were held in July 2005. The judiciary is nominally independent but
responds to executive direction, especially in political cases. The military
is professional and does not play a role in politics.

Tunisia's independence from France in 1956 ended a protectorate established
in 1881. President Bourguiba, who had been the leader of the independence
movement, declared Tunisia a republic in 1957, ending the nominal rule of the
former Ottoman Beys. In June 1959, Tunisia adopted a Constitution modeled on
the French system, which established the basic outline of the highly
centralized presidential system that continues today. The military was given
a defined defensive role, which excluded participation in politics. Starting
from independence, President Bourguiba placed strong emphasis on economic and
social development, especially education, the status of women, and the
creation of jobs, policies continued under the Ben Ali administration. The
results were strong social indicators--high literacy and school attendance
rates, low population growth rates, and relatively low poverty rates--and
generally steady economic growth rates. These pragmatic policies have
contributed to social and political stability.

Progress toward full democracy has been slow. Over the years President
Bourguiba stood unopposed for re-election several times and was named
"President for Life" in 1974 by a constitutional amendment. At the time of
independence, the Neo-Destourian Party (later the PSD)--enjoying broad
support because of its role at the forefront of the independence
movement--became the sole legal party when opposition parties were banned
until 1981.

When President Ben Ali came to power in 1987 he promised greater democratic
openness and respect for human rights, signing a "national pact" with
opposition parties. He oversaw constitutional and legal changes, including
abolishing the concept of president for life, the establishment of
presidential term limits, and provision for greater opposition party
participation in political life. But the ruling party, renamed the Democratic
Constitutional Rally (RCD), continued to dominate the political scene because
of its historic popularity and the advantage it enjoyed as the ruling party.
Ben Ali ran for re-election unopposed in 1989 and 1994. He won 99.44% of the
vote in 1999 and 94.49% of the vote in 2004. In both elections he faced weak
opponents. The RCD won all seats in the Chamber of Deputies in 1989, and won
all of the directly elected seats in the 1994, 1999, and 2004 elections.
However, constitutional amendments provided for the distribution of
additional seats to the opposition parties in 1999 and 2004. Currently, five
opposition parties share 37 of the 189 seats in the Chamber of Deputies. A
May 2002 referendum approved constitutional changes proposed by Ben Ali that
allowed him to run for a fourth term in 2004, and provided judicial immunity
during and after his presidency. The referendum also created a second
parliamentary chamber, and provided for other changes.

There are currently seven legal opposition parties, the Social Democratic
Movement (MDS), the Popular Unity Party (PUP), the Union of Democratic
Unionists (UDU), Ettajdid (also called the Renewal Movement), the Social
Democratic Liberal Party (PSDL), plus the Democratic Progressive Party (PDP)
and the Democratic Forum for Labor and Liberties or FDTL, the only two not
represented in the Chamber of Deputies. Most accept the basic economic and
social policies of the government but are critical of the pace of
democratization in the country--and focus considerable attention on support
for Arab causes. The parties are generally weak and divided and face
considerable restrictions on their ability to organize. The Islamist
opposition party, An-Nahdha, was allowed to operate openly in the late 1980s
and early 1990s despite a ban on religiously based parties. The government
outlawed An-Nahdha as a terrorist organization in 1991 and arrested its
leaders and thousands of party members and sympathizers, accusing them of
plotting to overthrow the President. The party is no longer openly active in
Tunisia, and its leaders operate from exile in London. There are several
pro-democracy activists who have been denied permission to establish other
opposition political parties.

While there are thousands of nominally established non-governmental
organizations, civil society also is weak. The Tunisian Human Rights League
(LTDH), the first such organization in the Arab world, operates under
restrictions and suffers from internal divisions. The Tunisian Association of
Democratic Women (ATFD), the Young Lawyers Association, and the Bar
Association also are active. The government has denied legal status to a
handful of other human rights advocacy groups who, nonetheless, attempt to
gather and publicize information on the human rights situation in the
country.

Although Tunisia states it is committed to making progress toward a
democratic system, citizens still do not have full political freedom. There
are curbs on the press and on freedom of speech. Many critics have called for
clearer, effective distinctions between executive, legislative, and judicial
powers. The foreign press and foreign-based satellite television channels
have criticized the Tunisian Government and demanded more freedom of speech
and greater respect for human rights. There are frequent reports of
widespread torture and abuse of prisoners, especially political prisoners, by
security officers.

Trade unions have played a key role in Tunisia's history since the struggle
for independence, when the 1952 assassination of labor leader Farhat Hached
was a catalyst for the final push against French domination. The General
Union of Tunisian Workers (UGTT), the country's sole labor confederation, has
generally focused on bread-and-butter issues but at some critical moments in
Tunisia's history has played a decisive role in the nation's political life.
Despite a drop in union membership from 400,000 to about 250,000 as the
structure of the Tunisian economy changed, the UGTT continues to hold a
prominent place in Tunisia's political and social life, and negotiates with
government and the umbrella employer group for higher wages and better
benefits. The current leadership, headed by Abdessalem Jerad, was elected at
an extraordinary congress in February 2002, held to reset the union's
direction after its former long-time leader was removed for embezzlement in
2000. The current board of directors includes some former dissidents and has
pledged to reinvigorate the union and increase its role in the country's
political life.

Tunisia is a leader in the Arab world in promoting the legal and social
status of women. A Personal Status Code was adopted shortly after
independence in 1956, which, among other things, gave women full legal status
(allowing them to run and own businesses, have bank accounts, and seek
passports under their own authority) and outlawed polygamy. The government
required parents to send girls to school, and today more than 50% of
university students are women. Rights of women and children were further
enhanced by 1993 reforms, which included a provision to allow Tunisian women
to transmit citizenship even if they are married to a foreigner and living
abroad. The government has supported a remarkably successful family planning
program that has reduced the population growth rate to just over 1% per
annum, contributing to Tunisia's economic and social stability.

Tunisia's judiciary is headed by the Court of Cassation, whose judges are
appointed by the president. The country is divided administratively into 24
governorates. The president appoints all governors.

Principal Government Officials
President--Zine El-Abidine Ben Ali
Prime Minister--Mohamed Ghannouchi
Minister of State--Abdelaziz Ben Dhia
Minister of Foreign Affairs--Abdelbaki Hermassi
Minister of National Defense--Hédi M'henni
Ambassador to the United States--Mohamed Najib Hachana

Tunisia's embassy in the United States is located at 1515 Massachusetts
Avenue NW, Washington, DC 20005 (tel. 1-202-862-1850, fax 1-202-862-1858).

ECONOMY
Tunisia is in the process of economic reform and liberalization after decades
of heavy state direction and participation in the economy. Prudent economic
and fiscal planning have resulted in moderate sustained growth for over a
decade. Tunisia's economic growth historically has depended on oil,
phosphates, agriculture, and tourism. The government's economic policies had
limited success during the early years of independence. During the 1960s, a
drive for collectivization caused unrest, and farm production fell sharply.
Higher prices for phosphates and oil and growing revenues from tourism
stimulated growth in the 1970s, but an emphasis on protectionism and import
substitution led to inefficiencies. Tunisia received considerable economic
assistance during this period from the United States and European and Arab
countries and is one of the few developing countries in the region to have
moved into the "middle income" category.

An overvalued dinar and a growing foreign debt sparked a foreign exchange
crisis in the mid-1980s. In 1986, the government launched a structural
adjustment program to liberalize prices, reduce tariffs, and reorient Tunisia
toward a market economy.

Tunisia's economic reform program has been lauded as a model by international
financial institutions. The government has liberalized prices, reduced
tariffs, lowered debt-service-to-exports and debt-to-GDP ratios, and extended
the average maturity of its $10 billion foreign debt. Structural adjustment
brought additional lending from the World Bank and other Western creditors.
In 1990, Tunisia acceded to the General Agreements on Tariffs and Trade
(GATT) and is a member of the World Trade Organization (WTO).

In 1996 Tunisia entered into an "Association Agreement" with the European
Union (EU), which will remove tariff and other trade barriers on most goods
by 2008. In conjunction with the Association Agreement, the EU is assisting
the Tunisian Government's Mise A Niveau (upgrading) program to enhance the
productivity of Tunisian businesses and prepare for competition in the global
marketplace.

The government has totally or partially privatized about 160 state-owned
enterprises since the privatization program was launched in 1987. Although
the program is supported by the UGTT, the government has had to move
carefully to avoid mass firings. Unemployment continues to plague Tunisia's
economy and is aggravated by a rapidly growing work force. An estimated 55%
of the population is under the age of 25. Officially, 14.3% of the Tunisian
work force is unemployed, but the real numbers of jobless or underemployed
are higher.

In 1992, Tunisia reentered the private international capital market for the
first time in 6 years, securing a $10-million line of credit for
balance-of-payments support. In January 2003 Standard and Poor affirmed its
investment grade credit ratings for Tunisia. The World Economic Forum ranked
Tunisia 41st in the 2004 Global Competitiveness Index Ratings (one place
behind South Africa, the continent's leader). In April 2002, Tunisia's first
dollar-denominated sovereign bond issue since 1997 raised U.S.$458 million,
with maturity in 2012. In June 2005 the central bank sold 400 million euros
of 15-year bonds in Tunisia's longest-dated euro deal.

The stock exchange is under the control of the state-run Financial Market
Council and lists nearly 50 companies. The government offers substantial tax
incentives to encourage companies to join the exchange, but expansion is
still slow.

The Tunisian Government adopted a unified investment code in 1993 to attract
foreign capital. More than 1,600 export-oriented joint venture firms operate
in Tunisia to take advantage of relatively low labor costs and preferential
access to nearby European markets. Economic links are closest with European
countries, which dominate Tunisia's trade. Tunisia's currency, the dinar, is
not traded outside Tunisia. However, partial convertibility exists for
bonafide commercial and investment transaction. Certain restrictions still
limit operations carried out by Tunisian residents.

In October 2002 the U.S. and Tunisia signed a Trade and Investment Framework
Agreement (TIFA) designed to provide a forum for discussions on expanding
trade and investment between the two countries. The first U.S.-Tunisia
Council on Trade and Investment envisioned under the agreement took place in
Washington, DC in October 2003, and the second in Tunis in June 2005. TIFAs
can be the first step towards a Free Trade Agreement (FTA), and the
Government of Tunisia has expressed interest in concluding an FTA with the
United States at some point in the future.

FOREIGN RELATIONS
President Ben Ali has maintained Tunisia's long-time policy of seeking good
relations with the West, including the United States, while playing an active
role in Arab and African regional bodies. President Bourguiba took a
nonaligned stance but emphasized close relations with Europe and the United
States.

Tunisia has long been a voice for moderation and realism in the Middle East.
President Bourguiba was the first Arab leader to call for the recognition of
Israel in a speech in Jericho in 1965. Tunisia served as the headquarters of
the Arab League from 1979 to 1990 and hosted the Palestine Liberation
Organization's (PLO) headquarters from 1982 to 1993, when the PLO Executive
Committee relocated to Jericho and the Palestinian Authority was established
after the signing of the Oslo Agreement. (The PLO Political Department
remains in Tunis.) Tunisia consistently has played a moderating role in the
negotiations for a comprehensive Middle East peace. In 1993, Tunisia was the
first Arab country to host an official Israeli delegation as part of the
Middle East peace process and maintained an Interests Section until the
outbreak of the 2000 Intifada. Israeli citizens of Tunisian descent may
travel to Tunisia on their Israeli passports.

Wedged between Algeria and Libya, Tunisia has sought to maintain good
relations with its neighbors despite occasionally strained relations. Tunisia
and Algeria resolved a longstanding border dispute in 1993 and have
cooperated in the construction of a natural gas pipeline through Tunisia that
connects Algeria to Italy. Tunisia recently signed an agreement with Algeria
to demarcate the maritime frontier between the two countries.

Tunisia's relations with Libya have been erratic since Tunisia annulled a
brief agreement to form a union in 1974. Diplomatic relations were broken in
1976, restored in 1977, and deteriorated again in 1980, when Libyan-trained
rebels attempted to seize the town of Gafsa. In 1982, the International Court
of Justice ruled in Libya's favor in the partition of the oil-rich
continental shelf it shares with Tunisia. Libya's 1985 expulsion of Tunisian
workers and military threats led Tunisia to sever relations. Relations were
normalized again in 1987. While supporting the UN sanctions imposed following
airline bombings, Tunisia has been careful to maintain positive relations
with her neighbor. Tunisia supported the lifting of UN sanctions against
Libya in 2003, and Libya is again becoming a major trading partner.

Tunisia has supported the development of the Arab Maghreb Union (UMA), which
includes Algeria, Morocco, Mauritania, and Libya. Progress on Maghreb
integration remains stymied, however, as a result of bilateral tensions
between some member countries.

U.S.-TUNISIAN RELATIONS
The United States has very good relations with Tunisia, which date back more
than 200 years. The United States has maintained official representation in
Tunis almost continuously since 1797, and the American treaty with Tunisia
was signed in 1799. The two governments are not linked by security treaties,
but relations have been close since Tunisia's independence. U.S.-Tunisian
relations suffered briefly after the 1985 Israeli raid on PLO headquarters in
Tunis, after the 1988 assassination of PLO terrorist Abu Jihad, and in 1990
during the Gulf War when Tunisia objected to U.S. intervention following
Iraq's invasion of Kuwait. In each case, however, relations warmed again
quickly, reflecting strong bilateral ties. The United States and Tunisia have
an active schedule of joint military exercises. U.S. security assistance
historically has played an important role in cementing relations. The
U.S.-Tunisian Joint Military Commission meets annually to discuss military
cooperation, Tunisia's defense modernization program, and other security
matters.

The United States first provided economic and technical assistance to Tunisia
under a bilateral agreement signed March 26, 1957. The U.S. Agency for
International Development (USAID) managed a successful program until its
departure in 1994, when Tunisia's economic advances led to the country's
"graduation" from USAID funding. Tunisia enthusiastically supported the
U.S.-North African Economic Partnership (USNAEP) designed to promote U.S.
investment in, and economic integration of the Maghreb region. The program
provided over $4 million between 2001 and 2003 in assistance to Tunisia. The
Middle East Partnership Initiative (MEPI) was launched in 2002 and
incorporated the former USNAEP economic reform projects while adding
bilateral and regional projects for education reform, civil society
development and women's empowerment. On August 18, 2004, the MEPI Regional
Office opened in Embassy Tunis. The Regional Office is staffed both by
American diplomats and regional specialists. It is responsible for
coordinating MEPI activities in Algeria, Egypt, Lebanon, Morocco and Tunisia
in close coordination with the American Embassies in those countries.

American private assistance has been provided liberally since independence by
foundations, religious groups, universities, and philanthropic organizations.
The U.S. Government has supported Tunisia's efforts to attract foreign
investment. The United States and Tunisia concluded a bilateral investment
treaty in 1990 and an agreement to avoid double taxation in 1989. In October
2002, the U.S. and Tunisia signed a Trade and Investment Framework Agreement
(TIFA), and in October 2003 held the first TIFA Council Meeting in
Washington, DC.

American firms seeking to invest in Tunisia and export to Tunisia can receive
insurance and financing for their business through U.S. Government agencies,
including the Overseas Private Investment Corporation (OPIC) and the
Export-Import Bank. The best prospects for foreigners interested in the
Tunisian market are in high technology, energy, agribusiness, food
processing, medical care and equipment, and the environmental and tourism
sectors.

Principal U.S. Officials
Ambassador--William J. Hudson
Deputy Chief of Mission--David L. Ballard
Political/Economic Counselor--Elizabeth A. Hopkins
Commercial Attaché--Marsha Lance

The U.S. Embassy in Tunisia is located in Les Berges du Lac 1053 Tunis,
Tunisia (tel: 216-71-107-000, fax: 216-71-107-090).