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The influx of investment capital from Kuwait and Saudi Arabia is a key element in Tunisia's economic expansion, and major quantities are likely to continue flowing in 2002 and 2003. Kuwaiti investments in Tunisia's tourism sector total about US$50 million per annum.

The value of foreign direct investment quadrupled over the past three years, thanks to substantial increases in capital coming from both Europe and the Middle East. Arab capital is also flowing into tourism and Tunisia's up-and-coming industrial sector. Industrial expansion reached about 7 percent during 2001 and gains of 4 to 6 percent are likely for 2002.

Industrial expansion and the construction of hotels will drive up demand for associated raw materials and equipment. The demand for capital goods is likely to increase 3 to 4 percent during 2002, while purchases of other industrial inputs will be up about 3 percent. This should lead to an increase of 2.5 to 4 percent in the value of Tunisian imports during 2002.

Investors in Gulf nations are positioning themselves to capitalize on Tunisia's economic expansion over the next few years, built on increasing trade with European nations. The director of the Tunisian National Tourism Office, Saifallah Al-Asram, revealed that Kuwaiti's participate in 27 Tunisian hotel projects. Funds are primarily funneled through two joint investment bodies: the Tunisia-Kuwait Development Bank and the Kuwaiti-Tunisian Investment Group.

The Tunisian tourism sector has grown an average of six percent per annum in recent years, although occupancy dropped off following the 11 September attacks. A rebound in business travel and industrial activity is likely during the second half of 2002.

Kuwaitis are the largest group of Arabian investors in the Tunisian hotel sector. Its total investment in Tunisia is second only to Saudi Arabia. Other leading sources of foreign investment in Tunisia include Libya, Qatar, and the United Arab Emirates. European investment funds mainly originate in Germany and France.
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Publication:Market Africa Mid-East
Date:Mar 1, 2002
Previous Article:JORDAN TO EXPAND US TRADE IN 2002.

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