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country focus | Tunisia Tunisia | country focus Light at the end of the tunnel? Tunisia’s image as an ideal holiday destination has now been stained by the rise of religious extremism widely covered by international newspapers The rise of Salafist-jihadist domestic activities is threatening Tunisia’s future. O By Charlotte Le Masson n Sunday 31 March, suspected Tunisian Salafists launched an arson attack against a new beachside development in Hergla, on the west coast of Tunisia. Salafist movements have previously attacked the entertainment sector targeting art galleries, museum and cinema since the 2011 revolution but tourism had never been targeted until this attack. Hergla is a not only a popular tourist destination, known for its beaches and sunny weather, but is also a stronghold for Salafists. Tunisia’s image as an ideal holiday destination has now been 40 CEO MIDDLE EAST May 2013 stained by the rise of religious extremism widely covered by international newspapers, and Tunisia’s main tourist sites and beaches are now empty of tourists. If this trend persists, the Tunisian economy will be badly affected as the government plans to leverage the tourism sector to spur economic recovery. Tunisia is a favoured tourist destination for Europeans, especially for French tourists looking for warm weather during the winter. Tourism was badly hit by the revolution as it fell by 50 percent between January 2010 and January 2012 and the government is desperately April 2013 CEO MIDDLE EAST 41 country focus | Tunisia The reality of Tunisia’s political and security instability has severely affected the tourism sector Unrest Tunisia is facing an emerging threat coming from domestic Salafi-Jihadist activities. trying to boost the sector as it represented 7.3 percent of its GDP in 2012. The government has been trying to encourage a recovery of its economy by expanding the tourism industry as it employed 217,000 people, representing 6.6 percent of total employment in 2012. Tunisia is keen to expand the sector in order to create jobs and respond to the unemployment crisis, given that one in five Tunisians are employed by the tourism industry. For example, the new beachside development in Hergla was supposed to attract tourists and create employment opportunities for the citizens of Hergla. This beachside development was one of the new projects being created alongside a new promotional tourism campaign launched in April with the slogan “Live in Tunisia Freely”. This new campaign seeks to promote Tunisia’s cultural heritage as well as health tourism such as water spa treatments and plans to attract 6.8 million tourists in 2013 and 10 million in 2016. Despite the government’s effort to encourage tourism and promote a secure country, the reality of Tunisia’s political and security instability has severely affected the sector. International agencies recently predicted a recovery in the sector Sector in a downturn One in five Tunisians are employed by the tourism industry. 42 CEO MIDDLE EAST May 2013 ad country focus | Tunisia Tunisia | country focus 7.3% Tourism sector’s contribution to the Tunisian GDP in 2012. 527,467 The number of tourists who visited Tunisia in the January/February period of this year. 50% Fall in Tunisia’s tourism numbers from January 2010 to January 2012. $1.87bn Foreign direct investment into Tunisia in 2012. during summer 2013, but with recent events and media coverage depicting a violent image of Tunisia, the tourist season has had a slow start. The number of tourists in the January/February period in 2010 was 657,607; in 2011 it was 361,824; in 2012 it was 566,161 and in 2013 it was 527,467. The decrease in the number of visitors between 2012 and 2013 is by 6.8 percent and by 19.8 percent between 2013 and 2010. This fall in visitors between 2010 and 2013 can be explained by the threat of instability throughout Tunisia. Managing director of Strategic Analysis political risk consultancy, Ruth Lux, comments: “Tunisia’s credit rating has been gradually downgraded by international ratings agencies as a consequence of Tunisia’s political instability raising costs for Tunisia to secure financing on international markets which it requires to reduce its budget deficit. “Tourism offset over a third of Tunisia’s 2.83 billion dinars ($1.76bn) trade deficit in the third quarter of 2012. Nonetheless foreign direct investment (FDI) increased from 1.62 billion dinars ($1bn) in 2011 to 3.00 billion dinars ($1.87bn) in 2012 suggesting that, provided political stability increases, Tunisia is unlikely to 44 CEO MIDDLE EAST May 2013 Suffering If the instability persists, the Tunisian economy will be badly affected as the government plans to leverage the tourism sector to spur economic recovery. Vital sector Tunisia plans to attract 6.8 million tourists in 2013 and 10 million in 2016. Leader Tunisian prime minister Ali Laarayedh. see a decrease in FDI.” Since 2011 political and security instability has manifested in a number of high profile incidents. On 14 September 2012, the US embassy in Tunis was attacked by hundreds of protesters after the release of a controversial film on Prophet Mohammad. As a result two people died and 29 were injured. The government blamed Islamic Salafists and particularly the most prominent jihadist organisation in Tunisia, Ansar Al Sharia. The attack was broadcasted around the world, projecting a negative image of Tunisia in the Western world and increased the perceived threat of a rising extremist movement. The escalation of general insecurity was exacerbated by the assassination of the government opposition leader. On 6 February 2013, Chokri Belaid was assassinated in front of his house which deepened tensions within the country. The secular party blamed the ruling Ennahda party for the assassination, while Ennahda has actively denied any involvement. Belaid’s assassination provoked civil unrest throughout the country and was followed by the resignation of prime minister Hamadi Jebali on 19 February 2013 further eroding political instability in Tunisia. While the attack on the US embassy and the assassination of the opposition leader Belaid had a negative effect on the tourism industry, Tunisia is facing an emerging threat coming from domestic Salafi-Jihadist activities aggravated by the return of Tunisian fighters from Syria. On 27 March, the government announced strict measures to prevent Tunisians from travelling to Syria as an alarming 30-40 percent of all foreign fighters in Syria are reportedly Tunisian. Young recruits go to Syria in order to fight jihad against the Assad government, they then return to Tunisia to either find funding in order to go back to Syria or come back with increased radical ideologies and fighting capability which they might use domestically. The attack on the beachside development in Hergla was a concrete manifestation of the impact of the rise in religious extremism on the tourism industry. Not only has the image of Tunisia been damaged abroad, but violent actions have been taken against a tourist site. Unlike its neighbouring countries, Tunisia has never suffered from a sustained terrorist campaign and recent domestic violence spreading across Tunisia has been blamed on groups such as Ansar Al Sharia Tunisia (AST). The government has been trying to tackle religious extremism by launching a series of counter-jihadist activities throughout the country. Operations have been launched especially in poorer areas in the west and the south of Tunisia, where extremist groups such as AST and other Salafi groups are gaining support from the population. These measures by the government have been perceived by AST as anti-Salafi-Jihadist. This could provoke a further escalation in violent confrontation. For example, on 26 March Abu Iyad Al Tunisi, a founder of AST, issued a warning via social media towards the prime minister Ali Laarayedh, threatening to overthrow his government. These measures taken by the government will not only create further political instability but might also exacerbate the rise in violent actions such as the arson attack in Hergla. This threat is not only affecting the country’s security but also the tourism sector as this overall instability will deter tourists impacting Tunisia’s tourism industry and, in turn, will have a direct impact on the national economy. There will be an increased likelihood of social unrest and possibility for greater instability, although as yet it is unclear the extent to which returning fighters from Syria play a part in enhancing the downward spiral. Charlotte Le Masson is a researcher at Strategic Analysis May 2013 CEO MIDDLE EAST 45 country focus | Tunisia “Tunisia’s economy is hampered despite the rebound in the tourism and mining sectors” Tunisia cuts 2013 growth forecast Tunisia’s Islamist-led government has cut its economic growth forecast for this year to four percent, down from a previous forecast of 4.5 percent due to events at home and in Europe, its finance minister said. Tunisia plunged into political crisis on 6 February when the assassination of secular opposition politician Chokri Belaid ignited the biggest street protests since the overthrow of strongman Zine Al Abidine Ben Ali two years ago. An uprising in January 2011 forced Abidine Ben Ali to leave Tunisia after 23 years in power, sparking the Arab Spring revolts that have swept the Middle East. “Because of some reasons, including the crisis in Europe and crisis at home we decided to reduce expectations for growth in 2013 by 0.5 percent to four percent, compared with 4.5 percent expected,” Elyess Fakhfakh told reporters. Tunisia said recently it plans to cut the budget deficit for this year to 5.1 percent of gross domestic product compared with the previous target of 5.9 percent. Inflation jumped to 6.5 percent in March, the highest rate in at least five years, reflecting high food prices, and the economy is struggling due to the slowdown in the eurozone, the main market for Tunisia’s exports and the source of most of its tourists. The International Monetary Fund is very close to reaching an agreement with Tunisia on providing a precautionary credit line worth $1.75bn, Amine Mati, head of an IMF mission to Tunisia, said. 46 CEO MIDDLE EAST May 2013 Fallen Opposition leader Chokri Belaid’s assassination provoked civil unrest throughout Tunisia. Tunisia’s tourism: The impact of political and security instability There has been a worrying rise in extremism and Salafist-jihadist movements since 2011 and reportedly 30-40 percent of foreign fighters in Syria are Tunisians; their return will undoubtedly impact security. Tunisia’s tourism industry constitutes: 7.3% of its GDP Security concerns have caused tourism to fall by... ...and creates employment for: 217,000 people work in the sector 50% Between january 2010 and 2012 1 in 5 People Government projects to attract visitors: 6.8 Million in 2013 & 10 Million in 2016 6.8% in the january/ February period in 2013 and 2012 and by 19.8% between 2013 and 2010