November 3, 2011
By Farah Halime
TUNIS// Last month, as Tunisia became the first Arab country to elect an assembly to rewrite the rules of its political system, and the death of Col. Muammar el-Qaddafi consolidated regime change in Libya, Tunisian businesspeople were positioning themselves for a new era of economic relations between the two countries.
The hope is that the overthrow of the two dictatorships will lead to more bilateral trade opportunities, liberalized economic practices, increased transparency and better regulation, bolstering growth in both countries.
“The big chance of Libya going in the right direction will also be a big chance for the region,” said Mohsen Zerelli, an executive at Groupe Mabrouk, a large conglomerate involved in the retailing, banking and telecommunications industries. “It will also start a new type of economic process and relationships in the region and North Africa.”
Under Colonel Qaddafi and the former Tunisian president Zine el-Abidine Ben Ali, “operators in North African countries never started that economic relationship with each other; each looked at business from a personal point of view,” Mr. Zerelli said. “Now governments will take into consideration the real interest of the people.”
Groupe Mabrouk, preparing to “restart” business after months of uncertainty, was paying particular attention to Libyan opportunities, he said.
Its proximity, past trade relations and immediate reconstruction needs make Libya an obvious target for Tunisian business. Although the country is rich in oil, most of its assets have been frozen, its economy has ground to a halt, and unemployment is rife.
Libya needs help, and for many Tunisians, providing that help is also the solution to Tunisia’s own growth and job creation challenges, in a country with an unemployment rate estimated by the International Monetary Fund at 13 percent last year.
Moncef Cheikhrouhou, a Tunisian economist and member of the secular Progressive Democratic Party, which trailed the Islamic party Ennahda in the elections, said that as many as 250,000 Tunisians could find work in Libya’s service and tertiary sectors.
Both countries could grow faster by strengthening their economic ties, added Mr. Cheikhrouhou, who was widely seen as a possible future finance or economy minister before the elections.
“If the countries of the Maghreb open their borders,” he said, “they could get another one to two percentage points on top of their ordinary growth.”
The fall of Mr. Ben Ali in January led to revolts in Egypt, Libya, Yemen, Syria and Bahrain but crushed Tunisia’s own economy, wiping at least $2 billion from its estimated gross domestic product in the first month of the revolution, Mr. Cheikhrouhou said.
Mr. Ben Ali and his family enriched themselves by acquiring assets from the state at low prices and luring overseas investors to do business with them, effectively locking out competitors.
Since his ouster, the interim government has seized about 100 companies that his family controlled, in a bid to rebuild a broadly based, more open and competitive economy. Seized companies have included some of the largest in the country, like Orange Tunisie and Banque de Tunisie.
Despite its corrupt and repressive government, Mr. Ben Ali’s Tunisia was well regarded by foreign investors, with a large, well-educated middle class and a liberal social system. Growth of gross domestic product averaged 5 percent a year in the decade before the 2008 financial crisis, according to I.M.F. figures. But it quickly slid into recession when the revolution wiped out tourism and normal business activity at the start of this year.
Before this year, trade agreements between Tunisia and Libya helped to foster an average 9 percent annual growth rate in trade between the two countries, well above the 6 percent annual growth in world trade, a U.N. Comtrade 2010 report said.
But amid Libya’s civil war and international sanctions against Colonel Qaddafi’s government, much of that trade ground to a halt, a breakdown that contributed significantly to Tunisia’s own economic dislocation.
Still, some sectors of the Tunisian economy have been less damaged than others: the health industry in particular has been a gainer.
Medical tourism has long been an important business, accounting for up to 5 percent of Tunisia’s services exports and 24 percent of turnover in the country’s private clinics, according to research from the African Development Bank.
During the civil war, hundreds of thousands of Libyans crossed the border to be treated for injuries sustained from cross-fire between rebel forces and Qaddafi loyalists.
Now clinics across Tunisia are brimming with Libyan patients paying thousands of dollars for treatment.
Hichem Bouchamaoui, chairman of Al Majd, a family holding company with interests in Tunisian real estate and health care, said the company’s health clinic in the center of Tunis was at full capacity, treating Libyan patients.
“Tunisia is working for two countries now,” Mr. Bouchamaoui said. “We were always popular with the Libyans for health treatment, but this is different. Right now we’re 100 percent full; I have no beds because half of them are taken up by Libyans.”
Libya’s interim government, the Transitional National Council, has been paying the health care fees of Libyan patients as long as they can prove they were wounded in fighting, he said. Fees range from $1,000 to $25,000 for amputees or those with serious injuries.
Like many businesspeople in Tunisia, he expects the country to invest huge amounts of cash in Libya, as it rebuilds infrastructure and banking systems and reinstates services industries.
Délice, the largest dairy company by market share in Tunisia, and a partner of Danone, has already begun negotiations to open an office in Libya.
“The reconstruction of Libya will take about 200,000 to 300,000 employees,” said Délice’s general manager, Boubaker Mehri. “How can we fit into that? We must find an approach on how Tunisia will benefit from this revolution.”