Tunisia needs investor vote of confidence from Macron visit

French President Emmanuel Macron is due to attend an economic summit and hold discussions on trade and security cooperation between France and Tunisia. (Reuters)
Updated 31 January 2018
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Tunisia needs investor vote of confidence from Macron visit

LONDON: Emmanuel Macron’s first visit to Tunisia on Wednesday comes at a crucial time for the country, which is reeling from widespread protests against austerity measures implemented in this year’s budget.
Thousands of Tunisians joined demonstrations against steep price hikes in January as years of anger over soaring unemployment and the rising cost of living bubbled into the streets.
The French president is due to attend an economic summit and hold discussions on trade and security cooperation between France and Tunisia. He is also expected to address the Tunisian parliament during his visit, which will last two days.
The two countries have strong economic and cultural ties that date from Tunisia’s history as a French colony before gaining independence in 1956.
Analysts said support from France could provide a lifeline for Tunisia’s parched economy, which has seen little progress since the overthrow of former ruler Zine El Abidine Ben Ali in the 2011 revolution.
“France is Tunisia's first economic partner … the Tunisian government expects much support from the French,” said Tasnim Abderrahim, a Tunisian researcher at the European Centre for Development Policy Management.
This includes the possibility that Macron will agree to convert some of Tunisia’s debts to France, which amounted to around $1.6 billion in 2016, into investments. France was the second-largest investor in Tunisia in 2016 and is the country's largest trading partner in the European Union.
“Tunisia also expects more support from France at the EU level,” Abderrahim said, commenting on its recent removal from an EU tax haven blacklist after it was added last year in a move that was seen by the Tunisian government as “an unfair and unjustified decision that can only tarnish the reputation of the country.”
Economic uncertainty and two major terrorist attacks on tourist targets in 2015 have alienated international investors and deprived the Tunisian economy of much-needed investment.
Saad Aldouri, Research Analyst on the Middle East and North Africa Programme at Chatham House said that French backing could inspire confidence and attract investment to wean people off the public sector and into private sector jobs.
“It’s up to France to lend support…. public confidence from Macron in Tunisia would go a long way toward re-building their case.”
However, analysts say the visit is likely to offer more diplomatic niceties than solid economic support.
"We can expect a lot of nice words but it's unlikely that Macron can offer anything on the scale of what Tunisia needs,” said Emma Murphy, professor of Political Economy at Durham University.
"The economy just cannot grow fast enough to create the number of new jobs needed every year, let along quality jobs that meet the education-fuelled aspirations of many young people.
Unemployment stands at around 15 percent in Tunisia, but soars to an estimated 30 percent among the country’s youth population, according the UN International Labour Organization.
Many of the countries problems are internal and require comprehensive reforms, which, more than seven years after the revolution, still haven’t materialized.
“Welfare support, subsidies and work-related benefits have been eroded so the bulk of the population is getting relatively poorer...the entire model is stuck in a downward spiral,” Murphy said.
"Tunisia needs a Marshall Plan and Macron doesn’t have that kind of money or clout.”
However, the French president can lead the way in encouraging more EU countries to lend support.
“Europe as a whole and France in particular could do a tremendous amount to make life better and more promising for Tunisians by increasing their opportunity to export into European countries,” David Mack, an expert with the Middle East Institute and former US Ambassador to the United Arab Emirates.
It’s also in Europe’s interests to do so, he added, with continued economic stagnation likely to result in “waves of migrations from Tunisia into Europe that would far exceed what has happened from Libya.”
“It’s the European countries that are going to be the primary victims if the situation in Tunisia continues to be stagnant economically.
“Macron and France could take an initiative for Europe to really make Tunisia economically prosperous and viable.”


North's Kim and South's Moon shake hands over demarcation line: TV

North Korean leader Kim Jong Un, left, crosses the border into South Korea, along with South Korean President Moon Jae-in for their historic face-to-face talks, in Panmunjom. (Korea Broadcasting System via AP)
Updated 47 min 30 sec ago
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North's Kim and South's Moon shake hands over demarcation line: TV

GOYANG, South Korea: With a single step over a weathered, cracked slab of concrete, North Korean leader Kim Jong Un made history Friday by crossing over the world’s most heavily armed border to greet his rival, South Korean President Moon Jae-in, for talks on North Korea’s nuclear weapons. Kim then invited Moon to cross briefly north with him before they returned to the southern side.
Those small steps must be seen in the context of the last year — when the United States, its ally South Korea and the North seemed at times to be on the verge of nuclear war as the North unleashed a torrent of weapons tests — but also in light of the long, destructive history of the rival Koreas, who fought one of the 20th century’s bloodiest conflicts and even today occupy a divided peninsula that’s still technically in a state of war.
It was all smiles Friday as Moon grasped Kim’s hand and led him along an blindingly red carpet into South Korean territory, where school children placed flowers around their necks and an honor guard stood at attention for inspection.
Beyond the surface, however, it’s still not clear whether the leaders can make any progress in closed-door talks on the nuclear issue, which has bedeviled US and South Korean officials for decades. North Korea’s nuclear and missile tests last year likely put it on the threshold of becoming a legitimate nuclear power. North Korea claims it has already risen to that level.
Kim’s news agency said that the leader would “open-heartedly” discuss with Moon “all the issues arising in improving inter-Korean relations and achieving peace, prosperity and reunification of the Korean peninsula” in a “historic” summit. It’s the first time one of the ruling Kim leaders has crossed over to the southern side of the Demilitarized Zone since the Korean War ended in 1953.
The greeting of the two leaders was planned to the last detail. Thousands of journalists were kept in a huge conference center well away from the summit, except for a small group of tightly-controlled pool reporters at the border. Moon stood near the Koreas’ dividing line, moving forward the moment he glimpsed Kim appearing in front of a building on the northern side. They shook hands with the border line between them. Moon then invited Kim to cross into the South; Kim invited Moon into the North, and they then took a ceremonial photo facing the North and then another photo facing the South.
Two fifth-grade students from the Daesongdong Elementary School, the only South Korean school within the DMZ, greeted the leaders and gave them flowers. Kim and Moon then saluted an honor guard and military band, and Moon introduced Kim to South Korean government officials. Kim returned the favor with the North Korean officials accompanying him. They were to take a photo inside the Peace House, where the summit was to take place, in front of a painting of South Korea’s Bukhan Mountain, which towers over the South Korean Blue House presidential mansion.
Nuclear weapons will top the agenda, and Friday’s summit will be the clearest sign yet of whether it’s possible to peacefully negotiate those weapons away from a country that has spent decades doggedly building its bombs despite crippling sanctions and near-constant international opprobrium.
Expectations are generally low, given that past so-called breakthroughs on North Korea’s weapons have collapsed amid acrimonious charges of cheating and bad faith. Skeptics of engagement have long said that the North often turns to interminable rounds of diplomacy meant to ease the pain of sanctions — giving it time to perfect its weapons and win aid for unfulfilled nuclear promises.
Advocates of engagement say the only way to get a deal is to do what the Koreas will try Friday: Sit down and see what’s possible.
Moon, a liberal whose election last year ended a decade of conservative rule in Seoul, will be looking to make some headway on the North’s nuclear program in advance of a planned summit in several weeks between Kim and US President Donald Trump.
Kim, the third member of his family to rule his nation with absolute power, is eager, both in this meeting and in the Trump talks, to talk about the nearly 30,000 heavily armed US troops stationed in South Korea and the lack of a formal peace treaty ending the Korea War — two factors, the North says, that make nuclear weapons necessary.
North Korea may also be looking to use whatever happens in the talks with Moon to set up the Trump summit, which it may see as a way to legitimize its declared status as a nuclear power.
One possible outcome Friday, aside from a rise in general goodwill between the countries, could be a proposal for a North Korean freeze of its weapons ahead of later denuclearization.
Seoul and Washington will be pushing for any freeze to be accompanied by rigorous and unfettered outside inspections of the North’s nuclear facilities, since past deals have crumbled because of North Korea’s unwillingness to open up to snooping foreigners.
South Korea, in announcing Thursday some details of the leaders’ meeting, acknowledged that the most difficult sticking point between the Koreas has been North Korea’s level of denuclearization commitment. Kim has reportedly said that he wouldn’t need nuclear weapons if his government’s security could be guaranteed and external threats were removed.
Whatever the Koreas announce Friday, the spectacle of Kim being feted on South Korean soil will be something to behold.
Kim and Moon will be enjoying each other’s company in the jointly controlled village of Panmunjom near the spot where a defecting North Korean soldier recently fled south in a hail of bullets fired by his former comrades.