HIGH-TECH INVESTORS ARE DRAWN TO TUNISIA

HIGH-TECH INVESTORS ARE DRAWN TO TUNISIA

Tunisia has been the most aggressive of the five nations of North Africa's Arab Maghreb Union in luring U.S. investors as political turbulence cripples neighboring Algeria.

The Journal of Commerce has learned that American Telephone & Telegraph Co.

sent a seven-person delegation to Tunisia this week to explore opportunities in that nation's plans to spend $1 billion on its telecommunications sector over the next five years.New York-based AT&T confirmed this but released no further details.

Also, a Washington, D.C., consulting firm is producing a feasibility study for the development of a high-technology industrial park in the capital city, Tunis.

"It (the park) will be an entree for U.S. companies to go abroad," said Charles Percy, a former U.S. senator who is president of Charles Percy & Associates. "Tunisia is also a bridge to the European Community."

The pressures on the region's stability have been highlighted by developments in Algeria, where the government has cracked down on supporters of the Islamic Salvation Front (FIS), which won the first round of a general election but was prevented from taking control of the nation when the second ballot was canceled.

Some 5,000 FIS sympathizers are being held in Algerian internment camps after being rounded up over the last two weeks, according to a Reuter report.

The growing popularity of Islamic fundamentalism in the region has created less worry for U.S. businesses than for the U.S. government.

Fundamentalists are not "inherently" hostile to trade and investment with U.S. companies, said Henry Schuler, director of energy and national security at the Washington, D.C., Center for Strategic and International Studies.

Rather, he said, he is concerned with the Bush administration's strong bias against the region's tide of Islamic renewal.

"It's a lack of imagination on the part of the Bush administration . . . They're rapidly developing a political posture that is alienating the forces of Islam," Mr. Schuler said.

Still, he advises U.S. businesses considering investment in Tunisia to "be wary of what they're doing." But his advice for companies with money in that country is to "quietly tell the (U.S.) administration to be even-handed" in its treatment of the political parties.

Tunisia's plan to develop a high-technology park is only its latest effort to woo foreign investors to the nation of 8 million people. Tucked between Libya and Algeria, Tunisia has traditionally turned to the European Community for nearly 80 percent of its trade and investment.

But since the mid-1980s, the former French colony has strengthened its business links with the United States as it relaxed its laws on foreign investment.

A U.S.-Tunisian Business Council was established in late 1989 in Atlanta, and an American-Tunisian Chamber of Commerce was set up in Tunis several months later. The Tunisian government's own Agency for the Promotion of Industry opened a Washington office last June.

"We're trying to diversify our trade and investment. We're trying to learn and avoid mistakes and avoid the flashy programs . . . to target as well as we can," said Elyes Kasri, executive director of the agency, an arm of the Ministry of National Economy. "We want to attract more knowledge-intensive industries rather than sweatshops."

Unisys Corp., the U.S. computer giant, said it is successfully selling its computer products to a growing market of government and private sector buyers in Tunisia.

Tunisys, a Tunisian company that sells the computer hardware and software products of the Blue Bell, Pa.-based Unisys, has annual sales of $10 million, said Fathi Farah, general manager.

"The market opportunities are the low-cost labor . . . and the geographical situation with Europe," said Mr. Farah, who is based in Tunis.

Tunisia's proposed high-tech park is intended to attract assemblers of computers and electronic components and the data-processing operations of foreign banks and insurers, Mr. Kasri said.

Eventually, the park is expected to attract companies that translate English-language computer software programs into Arabic, which can then be exported throughout the region.

"They've (Tunisia) been the most aggressive about promoting themselves," said Sarah Crawford, who works with the National U.S.-Arab Chamber of Commerce, Washington, D.C., as she compared Tunisia with the other four members of the Arab Maghreb Union: Morocco, Algeria, Libya and Mauritania.

The chamber recently arranged a trade mission to Tunisia for several U.S. companies.

The Overseas Private Investment Corp., a U.S. agency that provides financing and insurance coverage for U.S. companies doing business overseas, also sees possibilities in Tunisia's high-tech sector.

"It's a low-cost base of operations to move products into the European Community," said John Hereford, an investment development official at OPIC.

He said opportunities lie in the manufacture of electronics and parts for European vehicles, data-processing operations and the translation of English- language software programs into Arabic.

OPIC is planning an investment mission to Tunisia and Egypt this spring, he said.

TUNISIA AT A GLANCE

Gross Domestic Product: $10 billion, $1,235 per capita.

Exports: $3.3 billion, mostly petroleum, food, phosphates, chemicals.

Imports: $4.8 billion, including industrial goods and food.

Population: 8.3 million.

Area: 63,170 square miles.