TUNISIA - Mohammed Ben Hassouna Ghannouchi & The Government.

The PM since Nov. 17, 1999, Ghannouchi is a prominent economist. Until then, he was minister for international co-operation and foreign investment, a powerful portfolio which oversees Tunisia's relations with the EU, the IMF and the other multilateral agencies, as well as the management of Tunis' foreign borrowings and foreign investments into the country.

The previous PM was Hamed Karoui, who had held the premiership since September 1989. Ghannouchi's promotion followed President Ben Ali's election in October 1999 for a third term, and has been active in the government for the past 20 years.

Aged 68, Ghannouchi's elevation a PM was welcomed by the business community and foreign bankers as he was a committed advocate of economic reforms. Ghannouchi was made int'l co-operation and foreign investment minister in the cabinet reshuffle of 1995 as he replaced Slaheddine ben M'barek. His handling of the debt situation has earned him credit, with Tunisia having become the first Arab borrower to secure good investment grade ratings from US, EU and Japanese agencies. He is also credited for an increase in the flow of foreign investments to Tunisia.

Central to the government's strategy has been a programme of assistance to business intended to raise the quality of goods being produced by local industries to that of the EU. Tunisia is preparing for European competition. The dismantling of tariff barriers will expose local companies to full EU competition later on in this decade.

The programme has involved the ministries of industry and energy, economic development, finance, trade, employment and vocational training and international co-operation and investment. Most of the programme's funds are being used for modernising industries rather than starting major new projects. Credits have been made available on favourable terms for improvements to factories and for training.

Foreign companies are also attracted by Tunisia's large-scale efforts to improve its infrastructure and enhance industrial performance. Multinationals in the petroleum E&P business and services sector, which have long been leading sources of foreign investment in Tunisia, benefit from the 2000 petroleum law which provides oil and gas companies with a variety of incentives.

The government is particularly active in pursuing partnership with the EU, under an agreement signed in 1995 and ratified in 1998. This calls for a gradual removal of all tariffs on industrial goods form 2008. Tunisia is in advance of many of its legal obligations (see background in down16TunisWhoApr17-06).

Tunisia has been urging increased trade and economic ties within the Arab Maghreb Union (AMU), created in 1989 as a nucleus of a common market between Algeria, Libya, Mauritania, Morocco and Tunisia. Tunis envisages a Euro-Mediterranean free trade zone with 800m inhabitants by 2010. Tunis believes in the AMU, despite scepticism about unitary moves among Arab states, but it stresses this should focus more on trade than on politics. It believes that, as a trading bloc, Tunis and the other AMU states will have a better negotiating position with the EU and other such groupings.

Another aim for Tunis is the US-North African Economic Partnership, which encourages increased two-way trade and investment between the US and the Maghreb states. The US has chosen Tunis to be the base for its Greater Middle East Initiative, which aims to promote democracy in the Arab world as well as in Iran, Afghanistan and Pakistan (see News Service of this week's APS Diplomat in news16-ArabDemoApr17-06).

Tunis hopes that, eventually, the country would have a free trade agreement with the US. But for this to happen, Ben Ali's regime will have to improve its human rights record (see Gas Market Trends).

A growing number of foreign companies are investing in offshore industries in Tunisia which require that foreign investment account for at least 66% of equity and that at least 80% of production be exported. In return, companies like Benetton, Gap, Lee Cooper and Yves Saint Laurent are taking advantage of duty-free imports, lengthy tax holidays, tax relief for reinvested profits and other incentives.

Tunisia is a presidential republic with a bicameral parliamentary legislature. But the regime does not tolerate opposition.

Tunisia has a presidential regime. The president is elected by popular vote for a five-year term. MP are elected to a 189-seat Chamber of Deputies (lower house) from single-seat constituencies to a five-year term, with 80% of the seats allocated to the ruling Democratic Constitutional Rally (RCD) and 20% to the opposition. The 126-seat Chamber of Councillors (upper house) has 126 members, 85 of them indirectly elected by the lower house and city council members and 41 appointed by the president. The political system is dominated by the RCD, of which President Ben Ali is the leader and Tunisia only legal party for 25 years. There are six opposition parties, but they have no chance of governing.

Last presidential election: Oct. 24, 2004; Next election: 2009; Results of last presidential election (turnout 91.5%): Zine el-Abidine ben Ali, RCD, 4,202,292 votes, 94.5%; Mohamed Bouchiha, Party of People's Unity (PUP), 167,986 votes, 3.8%; Mohamed Ali Halouani, Renewal Movement Ettajdid (MRE), 42,213 votes, 1.0%; Mohamed Mouni Beji, Social Liberal Party (PSLl), 35,067 votes, 0.8%.

Last elections to lower house: Oct. 24, 2004; Next elections: 2009; Results of 2004 (turnout 91.5%): RCD, 152 seats; Movement of Socialist Democrats (MDS), 14 seats; PUP, 11 seats; Unionist Democratic Union (UDU), 7 seats; MRE, 3 seats; Social Liberal Party, 2 seats. President: Zine el-Abidine ben Ali Prime Minister: Mohamed Ghannouchi Special Adviser to the President & Spokesman of the Republic: Abdelaziz Ben Dhia The following are the ministers: Agriculture & Water Resources: Habib Haddad Communication Technologies: Haj Klai Communications & Relations with the Chamber of Deputies & the Chamber of Counsellors: Rafaa Dekhil Culture & Protection of National Heritage: Mohamed Aziz Ben Achour Development & International Co-operation: Mohamed Nouri Jouini Education & Vocational Training: Sadok Korbi Employment & Vocational Integration of Youth: Chadli Laroussi Environment & Sustainable Development: Nadhir Hamada Equipment, Housing & Land Development: Samira Khayache Belhaj Finance: Mohamed Rachid Kechiche Foreign Affairs: Abdelwaheb Abdallah Higher Education & Scientific Research: Lazhar Bououni Industry, Energy & Small- & Medium-Size Enterprises: Afif Chelbi Interior & Local Development: Rafiq Belhaj Kacem Justice & Human Rights: Bechir Tekkari National Defence: Kamel Morjane Public Health: Mondher Zenaidi Public Property & Real Estate Affairs: Ridha Grira Religious Affairs: Boubaker El-Akhzouri Scientific Research, Technology & Expertise Development: Taieb Hadhri Social Affairs, Solidarity & Tunisians Living Abroad: Ali Chaouch Tourism: Khelil Lajimi Trade & Handicrafts: Ridha Touiti Transport: Abderrahim Zouari Women, Children & Family Affairs: Sarra Kanoun Jarraya Youth, Sport & Physical Education: Abdallah Kaabi Director of the Presidential Cabinet: Ahmed Eyadh Ouederni Secretary General of the Government: Mounir Jaidane Governor, Central Bank: Taoufik Baccar