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Tunisian Economy reshapes relations between Tunisia and Libya

Experts believe that the economic rapprochement between Tunisia and Libya will pave the way to set a new strategic partnership in all fields

The visit of Tunisian Foreign Minister Khemais Jhinaoui to Tripoli recently, the first since 2016, drew new features in the economic relations of the two neighbours who are trying to break the cycle of crisis that has affected the lives of citizens of both countries.

Observers believe that Tunisia’s great efforts as a mediator to resolve the Libyan crisis are a strong impetus to strengthen the economic partnership with the UN-backed Libyan Presidential Council in Tripoli led by Fayez Al-Sarraj.

There are already efforts to promote and maintain the Libyan and Tunisian economies in these critical circumstances, particularly with Tunisia’s commitment to cooperate with its neighbours and to protect foreign investors, who are considered to be one of the main pillars of the Tunisian economy.

“The rapprochement between the two countries is necessary and important, so it is high time to adopt a new strategy so as to restore trade and investment ties to what it was before the two countries entered a crisis,” expert Anis El-Qasimi told the Arabs.

El-Qasimi pointed out that Tunisia has a valuable opportunity to lay solid foundations with the Libyans in order to obtain a share of the investments that Libya is expected to attract for the reconstruction of war-damaged cities such as the Mediterranean city of Sirte.

Libya is one of the most important economic partners of Tunisia, as it is the first partner in the Arab Maghreb and the fifth internationally after France, Italy, Germany and Spain.

Tunisian Foreign Minister Jhinoui agreed with his Libyan counterpart Mohammed Taher Sayala during their meeting last Monday in Tripoli to form a joint committee that would boost trade exchange, which has fallen in the past seven years.

“Libya is the second partner of Tunisia after the European Union and our country wants to restore this position by supporting trade and import from Libya, especially in the oil field, in response to the needs of Tunisia and in response to the Libyan interests,” he told a joint press conference.

It is expected that the volume of trade between Tunisia and Libya by the end of this year to reach about $ 643 million, compared to about $ 357 million last year.

“The aim is to raise the terms of trade until it returns to normal rates before 2011, which was then about two billion dollars a year,” local media quoted the head of the Chamber of Commerce and Industry, Mohamed Al-Raid as saying.

Al-Raid, member of the Libyan Council of State, said that there are many privileges to import goods of Tunisian origin, such as customs exemption between the two countries, in addition to the proximity of distances, as well as the corresponding certificate of analysis in one of the two countries.

In order to boost inter-trade exchange, the Central Bank of Libya and the Central Bank of Tunisia agreed in early May to open documentary credits to Libyan businessmen in hard currency rather than letters of credit in Tunisian dinars.

The exchange will be one of a series of other partnerships. The Presidential Council decided to inject more crude oil to Tunisia for its refineries to cover its energy deficit, which has doubled seven times since 2011.

Libya is seeking additional revenues from crude production to help it cover the rising costs, especially those related to the salaries of employees, who are seen queuing in front of banks, as well as reducing the budget deficit.

Unlike Libya which is OPEC member, and is in crisis due to political divisions, the situation in Tunisia looks better as the authorities adopt economic diplomacy to attract more investment and tourists.

The two countries are betting on the recovery of the tourism sector with Tunisia announcing the resumption of Tunisian flights to the Libyan destination. The Tunisian state-owned carrier is seeking to boost its financial revenues, which have fallen in unprecedented numbers, prompting the government to restructure it.

The flights of most foreign airlines, including Tunisia, to Libya have been completely halted in the wake of security unrest that escalated in 2014 due to battles between militias in the east and west, as well as the war on extremists.

More than 1.5 million Libyans travel to Tunisia every year, according to official statistics. Tunisians arrived in Libya before stopping travel because of the tense security situation.

The Libyan presidential council gave a glimmer of hope to Tunisian private hospitals when it promised to pay its dues of 200 million dinars ($ 77.8 million).

Those hospitals, which are experiencing financial problems, are still waiting to settle their financial situation with regard to their debts to the Libyan Government of National Accord, with some debts due to 2011.

The Government of National Accord has repeatedly called for a re-examination of all files whose debts have not been repaid, but Chamber President Boubaker Zakhama has repeatedly expressed his displeasure at Tripoli’s procrastination and vetoed earlier agreements on the file.

Libya Africa Investment Portfolio announced last April plans to inject new investments into Tunisia in various fields, reflecting strong economic ties and Tunisia’s promising market for Libyan investors, according to analysts.

TunisianMonitorOnline –MNHN (Translated from Al-Arab, article written by Riadh Bouazza)

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