Tunisia Seeks to Host VW Plant to Boost Employment, Besbes Says

Tunisia has approached carmakers including Volkswagen AG (VOW) and Toyota Motor Corp. (7203) to set up an assembly line as the North African nation seeks investments to deliver on a pledge to curb unemployment, an official said.

“We are working to attract car manufacturers, we have done that with Volkswagen,” said Slim Besbes, adviser to the prime minister on investment, also identifying Toyota as a company that has been approached. “The obstacle is not the internal situation, it’s the international context that is not favorable to investments in this industry.”

Tunisia should be attractive because it already manufactures components used by carmakers in Europe and has experience assembling buses, said Besbes, who spoke in an interview yesterday in Beirut.

Tunisia was the first Arab country that saw an autocrat toppled by street opposition. Its so-called Jasmine Revolution, which culminated in January 2011 with the overthrow of Zine El Abidine Ben Ali, inspired protests across the Middle East, leading to the ouster of longtime leaders in Egypt, Libya and Yemen.

Unemployment fell to 16.6 percent at the end of 2012, from 18.9 percent a year earlier, said Besbes. Foreign direct investment increased 75 percent last year, with Qatar ranking first among foreign investors, he said.

Investment Decline

FDI in the first quarter of this year declined about 10 percent from last year because of the crisis that followed the assassination in February of Chokri Belaid, he said. Belaid was a secular politician opposed to the Islamist group Ennahda that led the government elected after the fall of Ben Ali.

“Our priority goes for investments in the interior regions, we’re stepping up the incentives and public infrastructures there,” he said. “And we are counting on improving security, we are convinced that security is the real engine for investments.”

The 2011 uprising put the spotlight on the differences between the coastal region and the interior, where there is less access to health care and education, and where about a quarter of the active population is unemployed, according to the European Union.

To contact the reporter on this story: Maher Chmaytelli in Dubai at mchmaytelli@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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