POLITICAL AND ECONOMIC TRENDS IN MOROCCO AND TUNISIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00287R000801540001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 25
• Document Creation Date: December 22, 2016
• Document Release Date: August 20, 2010
• Sequence Number: 1
• Publication Date: December 2, 1983
• Content Type: REPORT

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King ..............................................Hassan II
Prime Minister ....................................Karim Lamrani, Mohammed
Minister of State .................................Osman, Ahmed
Minister of State .................................Bouabid, Maati
Minister of State .................................Bouabid, Abderrahim
Minister of State .................................Bahnini, Hadj M'hamrred
Minister of State .................................Boucetta, Whammed
Minister of State .................................Aherdane, Mahjoubi
Minister of State .................................Alaoui, Moulay Ahmed
Minister of State .................................Jadidi, Mohamed Arsalane el
Minister of Cooperation .. ........................Radi, Abdel Quahed
Minister of Foreign Affairs .......................Belkziz, Abdelouahed
Minister of Planning, Cadre
Training & Vocational Training ..................Douiri, M'Hamed
Min. of Agriculture & Agrarian
Reform ......................... ...............Demnati, Othman
Min. of Commerce, Industry & Tourism ..............Guessous, Azzedine
Min. of Cultural Affairs ..........................Belbachir, Said, Dr.
Min. of Energy and Mines ..........................Saadi, Moussa
Min. of Equipment .................................Kabbaj, Mohamed
Min. of Finance ...................................Jouahiri, Abdellatif
Min. of Housing & Land Management .................Lahlou, M'Faddel
Min. of Information ............................... Filali, Abdellatif
Min. of Interior ..................................Basri, Driss
Min. of Justice...... ....... ....................Alaoui, Moulay Mustapha Belarbi
Min. of Labor & National Training .................Zahidi, Moulay Zain
Min. of National Education ........................Laraki, Azzedine, Dr.
Min. of Ocean Fisheries & Merchant Marine.........Smili, Bensalem
Min. of Posts & Telecommunications ................Ansar, Mohamed el
Min. of Public Health .............................Rahal, Rahali, Dr.
Min. of Relations with Pariament ..................Belhaj, Ahmed
Min. of Religious Endowments & Islami
Affairs .........................................Filali, Hachemi
Min. of Traditional Industry & Social
Affairs .........................................Fassi, Abbes el
Minister of Transportation ........................Ben Ali, Mansouri
Min. of Youth and Sports ..........................Semlali, Abdellatif
Min. Delegate in the Prime Minister's
Office ..........................................Ghallab, Abdelkarim
NESA M#83-10337
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Political and Economic Trends in Morocco
Among the North African countries, Morocco's history has the
greatest continuity. The dynasty of King Hassan can be traced
back to the seventeenth century and the monarchy itself has
existed with only brief interruptions since the ninth century.
This continuity has a powerful influence on contemporary
Moroccans, the majority of whom have strong allegiances to their
King as the nation's religious and political leader and have been
relatively undemanding with regard to major economic and
political reform. In the wake of two attempted military coup
d'etat in the early 1970s, King Hassan has ruled much more
attentively, demonstrating both skill and ruthlessness in dealing
with potential opposition and competing interest groups. His
relatively secure position at home has allowed the King to play
an active role in Middle East politics where he has been a voice
for moderation and a reliable friend of the United States.
Although the majority of Moroccans seem satisfied with King
Hassan's rule, he is likely to face great problems over the next
several years as a result of a deteriorating economy, high
expectations among a burgeoning, youthful population, and a
costly and seemingly unwinable war in Western Sahara.
Morocco's "Democratic Experiment"
Shortly after independence from the protectorate powers of
France and Spain in 1956, King Mohammed V--Hassan's father--began
what has become known as the country's "democratic experiment."
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From a series of constitutions--the most recent promulgated in
1972--the structure of a constitutional monarchy has evolved
complete with a parliament, political parties, and local
governments elected by universal suffrage. In fact, the King's
powers remain all embracing and what constitutinal restraints
there are have been periodically abridged by the King's
imposition of emergency powers.
The Moroccan parliament sits for a six-year term and is
composed of a single chamber, two-thirds of which is elected by
direct universal suffrage. The other third of the membership is
selected by local councils and trade, artisan, and labor
organizations. Local governments are elected and hold
considerable power in the conduct of day-to-day activities
affecting the average citizen. Provincial governors are
appointed by the King.
The King's authority and his manipulation of Morocco's
political system have prevented the formation of political
institutions with enough power and credibility to restrict
Hassan's ability to make all major decisions. The small
Socialist Union of Popular Forces, Morocco's only credible
opposition party, in recent years has had its activities severely
restricted. The token pro-Soviet communist party--Party of
Progress and Socialism--is fairly tame but does have a
significant following in youth and intellectual circles.
Predominance of the Monarchy
King Hassan II--who is 54 years old--is the epitome of a
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traditional Moroccan monarch. He is a highly self-confidant and
paternalistic leader who believes he is uniquely qualified to
determine what is best for his country. Hassan feels a strong
commitment to perpetuate the Moroccan monarchy--the oldest
reigning dynasty in the Arab world--and any challenge to his
leadership intensifies his determination to succeed in carrying
out his inherited role.
The King's style of rule is based on the adroit manipulation
of competing interest groups through divide-and-rule tactics.
Hassan's considerable skills in political manipulation have
enabled him to maintain the upper hand. Nevertheless, faced with
complex issues such as the Moroccan economy, where Hassan lacks
technical knowledge, he sometimes overvalues his own opinion,
according to a US Embassy report.
Hassan, in addition to his role as head of state and Supreme
Commander of the Armed Forces, has a unique position of leader of
Morocco's Islamic community based on tradition and further
legitimized by the country's constitution. Further strengthening
the King's position is the popular belief that he possesses
baraka, an aura of holiness which is seen as the manifestation of
divine grace transmitted through the Prophet's descendents,
enhancing the mystical regard that thousands of rural and poorly
educated Moroccans have for the monarchy.
Following two military coup attempts in 1971 and 1972 led by
personally ambitious senior officers, Hassan abolished the
position of Minister of Defense and assumed direct control of the
military as chief of general staff. Although the military has
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regained some of its lost prestige, the armed forces remain an
object of palace suspicion; officers' activities are closely
watched; the military's combat capability is restricted; and
command and control at the top rests with the King.
Hassan, who personally controls foreign policy, often leaves
domestic affairs to various ministries and government
technocrats. According to US Embassy reports, Morocco is a
relatively open society, and free discussion of most subjects--
except Islamic religion and the monarchy--occur on a daily basis
in a variety of newspapers, most of which are political party
organs. Although advanced censorship is forbidden, the
distribution of some publications occassionally has been
prevented, in particular when articles critical of the King
appear. Morocco's major labor unions are active in defending
worker interest, and the judicial system, which answers only to
the King, is efficient.
Although the King appears secure for the near term, Hassan
faces growing domestic challenges. Deteriorating economic
conditions coupled with rising expectations among the burgeoning
and youthful population, are sources of popular discontent.
There is restiveness among students, the labor movement, and some
Islamic fundamentalists who are searching for issues on which to
challenge the King. Morocco's military and security forces
appear loyal, but there is some dissatisfaction among younger
officers over the poor quality of senior leaders. Although the
King has shown considerable skill in managing opposition, the
possibility of a challenge by small, disgruntled elements of the
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military, as in the early 1970s, or of religious extremists
moving against Hassan cannot be ruled out.
Hassan's son, 20-year-old Crown Prince Sidi Mohammed, is the
designated heir to the throne. Sidi Mohammad's selection has
been approved by the religious leaders of the country and is in
accordance with the current Moroccan constitution. He has been
groomed since childhood to assume control of Morocco.
Foreign Policy and the King
Hassan personally plays the central role in the formulation
of Moroccan foreign policy--at times at the expense of timely
attention to domestic issues. His moderate position on most
issues often parallel or coincide with those of the United States
and the Tlest in general.
The King espouses a strong identification with Arab causes,
especially the struggle to recover Palestine. Hassan, for
example, was host to an Arab summit in 1974 that laid the ground
work for Islamic bloc votes in the United Nations in favor of the
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Palestine Liberation organization, and he contributed troops to
the Arab-Israeli war in 1973. The King was chairman of the Arab
League from 1981 to 1983 and heads its Fez Middle East peace
committee. Hassan also chairs the Islamic Conference
Organization's Jerusalem committee.
France is Morocco's principal trading partner and a primary
source of financial assistance, and Rabat depends heavily on
Paris for arms and military training. The French also have
considerable investments in Morocco. Nevertheless, there was a
noticable cooling of relations following the election of the
French socialist government in 1981. The relationship has
improved since President Mitterrand's visit to Morocco in early
1983, and Rabat appears to accept Paris' attempts to balance its
relations with Morocco while improving ties with Algeria.
Rabat looks to the United States as a strong friend, along
with France and Saudi Arabia. The King, during a visit to
Washington in May 1982, approved a Moroccan-US access and transit
agreement for US Rapid Deployment Forces. US-Military
assistance--primarily FMS loans--increased sharply to $101
million in Fiscal Year (FY) 1983 with $91 million requested for
FY 1984. Economic assistance totalled $48 million last year with
$61 million requested for FY 1984. Credits and guarantees
provided by the Commodity Credit Corporation of $197 million in
FY 1983 probably will be the same or higher in FY 1984. Combined
US economic assistance accounted for about 20 percent of the
foreign assistance received by Rabat in 1983. Banks in the
United States hold about 20 percent of the nation's $3 billion in
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outstanding commercial debt.
Improved US-Moroccan ties in recent years have been well
received, but some Moroccans are beginning to question the value
of closer relations with the United States as their expectations
for military assistance and other benefits from the access
agreement remain unfilled. Furthermore, if Morocco continues to
cultivate closer ties with Algeria and Libya in the current
Maghreb unity effort, Rabat may feel compelled to be more
discreet in its relations with the United States--especially in
military matters.
The eight-year-old dispute over Moroccan claims of
sovereignty in Western Sahara is Rabat's most serious foreign
policy concern. Hassan has made the Sahara question one of royal
prerogative, not only because he is charged constitutionally with
wide powers in national security, but because the historical
foundation of Morocco's claim to western Sahara is based on the
traditional oath of fealty to the Sultan of Morocco sworn by
Saharan tribes. For most Moroccans, according to a US Embassy
report, the central issue is ensuring the continuing loyalty of
Saharan subjects, despite the disruptive efforts of
"mercenaries"--read Polisario Front--aided by Rabat's
neighbors. Although acquisition of the Sahara remains a popular
cause among Moroccans, the seemingly "unwinnable" war could
eventually cause domestic trouble for the King and further divide the
organization of African Unity if a solution is not found.
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The Economy
Morocco is endowed with extensive water resources and arable
land. The nation controls about two-thirds of proved world
phosphate resources and the fourth largest deposits of oil
shale. Little tapped fishery resources rank as some of the
richest in the world. The existing economic infrastructure
rivals any in Africa. Despite these resources, rapid population
growth and severe financial constraints have limited the
development of Morocco's economic potential.
The economy has not rebounded from the slowdown brought
about by the three-year (1978-80) austerity plan and changing
international and internal economic conditions. Mounting
financial strains stemming from overly ambitious government
spending during the 1973-77 development plan and the collapse of
the phosphate market in 1976 forced Rabat to shift gears and
adopt a less ambitious development program. While austerity
measures helped reduce the nation's trade and budget deficits,
they hit the modern sector of the economy especially hard. Slow
economic growth has produced escalating unemployment. Wage
increases have failed to keep pace with double-digit inflation.
Real GDP growth averaged only 2.7 percent since 1978 in
sharp contrast with the 7 percent growth of the previous five-
year period and about equal to the rate'of population increase.
The phosphate industry, the nation's largest foreign exchange
earner, has been especially hard hit. Soft market conditions
forced Rabat to sharply trim its phosphate rock prices since
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1981. As a result, foreign exchange earnings from rock exports
have declined by over 25 percent. Despite these setbacks, plans
are progressing to expand domestic production capacity with a
goal of converting 30 percnet of phosphate rock annually into
refined products by 1985.
Growth in agricultural production of about 1.5 percent
annually has failed to keep pace with the needs of Morocco's
rapidly growing population. Poor performance in agriculture
because of recurring drought, and especially the severe drought
in 1981, is a contributing cause of the nation's economic
plight. With the livelihood of about half of the population
dependent on agriculture, the drought's impact has been
widespread. The rural exodus has increased dramatically.
Financing large grain imports has severely taxed Rabat's national
budget and foreign payments position and consumed a large share
of available foreign financing.
The severity of recent droughts means that even with a
return of favorable weather it will take several years to restore
the agricultural sector to its predrought position. During this
period, heavy grain imports will be required to allow farmers to
rebuild depleted grain stores and livestock herds.
Heavy defense expenditures also have contributed to the
economic malaise. Defense-related expenditures have accounted
for an estimated 40 percent of national' operating budgets in
recent years. While the cost of the Saharan conflict has largely
been defrayed by Saudi Arabian assistance totaling as much as a
billion dollars annually in recent years, it draws attention and
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other resources from pressing economic concerns.
Morocco's foreign payments position has deteriorated sharply
in the wake of declining export earnings, drought-induced grain
imports, and the substantial depreciation of the dirham against
the US dollar. Current account deficits have increased from $1.3
billion in 1978 to $1.8 billion in 1983. This condition has
again forced Rabat to stiffen austerity measures. Along with
these measures the government has undertaken efforts to
reschedule some of its burdensome foreign debt which consumes
about half of annual export earnings in service payments.
The nation's five-year development plan (1981-85) has
suffered a serious blow because of the foreign exchange shortage
and is in danger of being scrapped. Investment under this plan
is far behind schedule. The phosphate industry has received
priority over spending in the manufacturing and mining sectors.
Outlook
Although the nation has significant potential for
development, financial difficulties will remain acute for at
least several years and will require that the King devote more of
his attention to the economy. With large current account
deficits persisting through 1986, the government will be hard
pressed to launch most aspects of its development plan. Economic
growth will be slowed by the austerity program, and unemployment
will remain a troubling issue. Even with renewed access to IMF
loans and a partial rescheduling of the foreign debt, the
nation's tight financial position will serve to increase
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dependence on foreign aid--particularly from Saudi Arabia.
Should US assistance not meet Rabat's expectations or if economic
growth declines sharply, closer US-Moroccan ties could become the
focus of concern among dissatisfied elements--including the
military.
King Hassan II, faces growing prospects for domestic unrest
under these economic circumstances. Deteriorating financial
conditions coupled with rising expectations among the youthful
population--one-half under 20 years-old--are key sources of
discontent. Hassan is not, in our opinion, blind to these
problems and the potential political difficulties that may be
ahead. Although the King faces the likelihood of popular
outbursts and may have to rely more heavily on the country's
relatively efficient security forces to maintain order, we
believe that Hassan is secure for the near term. Nevertheless,
King Hassan, like the late Egyptian President Sadat, could fall
victim to a religious fanatic or a small disgruntled group with
little or no warning.
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President ......................................... Bourguiba, Habib
Prime Minister .................................... Mzali, Mohamed
Special Adviser to the President .................. Bourguiba, Habib, Jr.
Min. of Agriculture ............................... Ben Osman, Lassad
Min. of Culture ................................... Ben Slama, Bechir
Min. of Family & Women's Advancement .............. Mzali, Fathia
Min. of Finance ................................... M'Barka, Salah Ben
Min. of Foreign Affairs ........................... Caid es-Sebsi, Beji
Min. of Higher Education
& Scientific Research ........................... Ben 'Dhia, Abdelaziz
Min. of Housing ................................... Anor, Moncef Bel Hadj
Min. of Information ............................... Kefi, Abderrazak
Min. of Interior .................. ................ Guiga, Driss
Min. of Justice ................................... Chaker, Mohamed
Min. of Natl. Defense... ............. o ......... oo. Baly, Slaheddine
Min. of Natl. Econany ............................. Sfar, Rachid
Min. of Natl. Education ........................... Chedli, Mohamed Fredj
Min. of Plan ...................................... Khelil, Ismail
Min. of Public Health ............................. Tcuhami, Habib
Min. of Pubic Works . .............................. Ben Jomaa, Sadok
Min. of Social Affairs ............................ Ennaceur, Mohamed
Min. of Tourism & Handicrafts........... ..... ooo.o Chelbi, Ezzedine
Min, of Transport & Communications................ Khouaja, Brahim
Min, of Youth & Sports ............................ Kraien, Mohammed
Min. Attached to the Prime Minister............... Kooli, Mongi
Min. Attached to the Prime Minister
for Civil Service & Admin. Reform... ....... o ... o Chekir, Mezri
H e a l t h . . . ............ Yaacoubi, Souad
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Political and Economic Trends in Tunisia
Habib Bourguiba has been Tunisia's President since the
country gained independence from France in 1956. Under his
leadership, Tunisia has experienced remarkable economic growth
despite its narrow resource base, its limited markets, and a
shortage of investment capital. Bourguiba's prestige and keen
political acumen have discouraged serious challenges to his
authority during this period. His policy of friendship with the
West has gained Tunisia a large measure of protection from its
larger, better-armed neighbors, Libya and Algeria.
Despite these achievements, Tunisia will face unprecedented
challenges soon. Bourguiba -- 80-years old
nearing the end of his rule. His paternalistic, but
authoritarian style has stifled demands among increasingly well-
educated Tunisians to liberalize the country's political
system. Rapid modernization and improvements in the standard of
living have generated unrealistically high expectations for
prosperity and opportunity among all classes of Tunisians--
including the country's youth, who comprise over 70 percent of
the population. An increasing number of Tunisians have responded
to the dislocations of rapid social change by embarking on a
search for their cultural, linguistic, and religious identity.
These developments have weakened the institutional fabric of
political life in Tunisia and increased the chances for
instability in the post-Bourguiba era.
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Bourguiba's Tunisia
Habib Bourguiba has been at the forefront of Tunisian
politics for almost fifty years. The prestige and power that
have accrued to him for his role in leading Tunisia's drive for
independence have secured his predominant position in Tunisian
politics.
Bourguiba is a consummate politician who has dedicated his
life to steering Tunisia on a path consistent with his own values
and vision of Tunisia's future. He has sought to avoid coercion
and repression and to blend pragmatism and rapid change. In
doing so, however, his avowedly secular policies have largely
ignored the Arab-Muslim character of Tunisian society,
contributing to a malaise caused by the disruption of traditional
values.
Bourguiba's genius has been his ability to make Tunisia's
closed political system work for nearly 30 years behind a
democratic facade. Bourguiba has presided over the drafting of a
constitution, sponsored elections, created political institutions
and, in 1976, regularized the procedures for succession. Under
Bourguiba, a modern political party -- the Destourian Socialist
Party, successor to the Neo-Destour Party founded by Bourguiba in
1934 -- became a key source of legitimacy for the regime.
Bourguiba, however, has until recently retained a
stranglehold on power. He has replaced cabinet ministers at will
and severely limited the political independence of even his most
trusted subordinates. Although Tunisia's National Assembly and
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President are elected concurrently every five years, an amendment
in 1974 named Bourguiba President for life. Bourguiba also was
accused, of interfering in Tunisia's
November 1981 election to ensure the appointment of his favorites
to the legislature.
Except for the politically insignificant Communist Party,
Bourguiba's Destourian Socialist Party was until recently
Tunisia's only legal political party. While its open membership,
coordination committees in the governates, and cells among
Tunisian workers provide important avenues for political
participation, disciplinary commissions insure loyalty to the
party line. Under the watchful eye of Bourguiba the PSD explains
and mobilizes support for government policies.
The Succession Issue
The question of who will succeed Bourguiba has been the key
political issue in Tunisia for sometime, but until the mid-1970s
Bourguiba vacillated over how his successor should be chosen.
Finally, in 1976 Bourguiba sponsored a constitutional change
specifying that in case of a presidential vacancy the Prime
Minister will assume the functions of the presidency for the
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remainder of the term of the National Assembly--which currently
runs until November 1986. If the Prime Minister is
incapacitated, next in line are the President of the National
Assembly and the Minister of Justice. Presidential candidates
for a new term must be approved by a government commission, and
then run against each other in a nationwide popular election.
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The Tunisian armed forces generally have been apolitical.
Since independence, President Bourguiba has maintained tight
civilian control over the military and kept it out of political
controversies. But senior officers -- drawn from the Tunisian
establishment that produces the government and party elite --
have a strong stake in stability. If the succession period is
accompanied by prolonged crisis, the military may move to secure
an orderly transfer of power or to insure that their own favorite
assumes the Presidency. 25X1
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Pressure Groups
Organized opposition groups in Tunisia have not gained a
great deal of strength, in large part because the PSD coopts many
critics of the regime. Several groups, however, have the
potential to significantly influence Tunisian politics in the
post-Bourguiba era. They include disaffected liberals, trade
unionists, and Islamic fundamentalists. Other opponents of the
regime, such as the socialist-oriented Movement of Popular Unity,
Baathists, Nasserites, and several extreme leftist groups,
operate clandestinely or have been based abroad and have little
following.
The Social Democrats, led principally by Ahmed Mestiri, are
the most visible and tolerated of the exclusively political
opposition groups. Recently legalized, they are a collection of
former government officials and members of the Destour Party who
draw their support largely from the professional middle class.
The Social Democrats are reformers who favor working within the
system to accomplish its modification.
The labor movement in Tunisia rivals the ruling PSD in size,
organization, and longevity. Following independence, the General
Union of Tunisian Workers (UGTT)--Tunisia's only labor Union
federation--was successfully used by Bourguiba as an instrument
of support for his far-reaching social and economic programs.
Over the last 10 years, however, the UGTT, headed by Hadid
Achour, has gradually become large enough and sufficiently broad
based to challenge the ruling party and government on economic
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issues.
Islamic fundamentalists are gaining strength and have become
more active since Ayatollah Khomeini's takeover in Iran in
1979. The fundamentalists, most of which by far are organized
into the Mouvement de la Tendence Islamigue (MTI), are pushing
for a general return to the more conservative doctrines of Islam
to halt what they regard as the moral decay brought about by
Bourguiba's strongly secular policies. More extreme
fundamentalist groups, such as the trans-national Islamic
Liberation Party or Hizb al-Tahrir, favor replacing the current
government entirely by religious leaders. Continuing attempts by
Tunisian security forces to check fundamentalist activity--
including the arrest of virtually the entire MTI leadership in
1981--have failed to stem the emotive appeal of the Islamic
resurgence. The fundamentalists are the only important
opposition group with any interest in destabilizing Tunisia and
would almost certainly try to take advantage of the uncertainty
and political infighting that might ensue following Bourguiba's
departure.
Tunisia's Foreign Policy
The chief concern of Tunisian foreign policy is to protect
the country from its larger neighbors--Libya and Algeria.
Tunisia views its fears as having been confirmed by the raid on
Qafsah in 1980 by Tunisian dissidents backed by Libya with the
collaboration of some Algerian party officials. Tripoli's
continuing support for Tunisian exiles contributes to Tunis'
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distrust of Libyan leader Qadhafi even during his periodic
attempts to mend fences. Tunisian relations with Algeria have
improved, however, since the two countries signed an agreement in
March 1983, resolving their longstanding border dispute.
Lacking the manpower and resources to keep pace militarily
with Libya and Algeria, Bourguiba has forged tacit security
relationships and acquired virtually all of its arms and training
assistance from France and the US. Tunisia also welcomes visits
by their naval combatants to demonstrate their interest in
Tunisian security. Bourguiba in fact has often referred to the
US 6th Fleet as Tunisia's "shield in the Mediterranean." 25X1
Bourguiba's firm pro-Western orientation also is designed to
elicit foreign aid and investments. Washington has provided
Tunis with almost $1 billion in economic assistance since Tunisia
gained independence in 1956, but the US plans to phase out its
concessional economic assistance program by 1985 because
Tunisia's growing per capita income makes it ineligible for
further US PL-480 concessional aid. Differences with France
resulting from its claims for compensation for property
nationalized in 1964 by Tunisia have led to several temporary
cutoffs of French economic aid. However, former French President
Giscard d'Estaing's strong concern to preserve Paris' historic
spheres of influence led him to restore French assistance in the
mid-1970s.
Tunisia consistently adopts a moderate approach to
international problems. Tunisia has encouraged dialogue and
compromise in international forums such as the Organization of
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African Unity, the Arab League, and the United Nations.
At the same time, Tunis maintains cordial relations with a
number of Eastern European states and normal, but not overly warm
relations with the Soviet Union in part to enhance its non-
aligned credentials. Tunisia permits Soviet naval visits and the
use of ship repair facilities by vessels of the Soviet
Mediterranean squadron.
Tunisia's strongest relations predictably are with the
moderate Arab states and has adopted a balanced approach to Arab-
Israeli issues. Bourguiba, for example, has quietly endorsed the
Camp David accords and sometimes worked behind the scenes to
encourage Arab acceptance of Israel. On the other hand, Tunisia
sent a small military contingent and material aid to Egypt and
Syria during the 1973 war with Israel and has strongly endorsed
the Palestinians' right to statehood. The success of this
balanced policy was highlighted in 1979 when Arab states opposing
the Camp David accords moved the seat of the Arab League from
Cairo to Tunis, and in 1982 when the leadership of the
Palestinian Liberation Organization chose Tunis for its
headquarters after the PLO evacuated Beirut.
Development Strategy
Tunisia's economy, which prospered in the immediate post-
independence period thanks to a relatively stable political
environment achieved under President Bourguiba, now faces some
challenges. Worldwide recession of the last few years has
severely affected Tunisia's major foreign exchange earners--
petroleum, tourism, and phosphates--and has hampered economic
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growth. A well-educated populace is demanding more social
spending and is critical of higher military outlays. Only
limited improvement in agricultural performance is requiring
imports of a high portion of domestic food needs, while rising
unemployment and inflationary tendencies are also adding to the
economic difficulties.
Tunisia is interested in promoting oil and gas exploration
and development but is cautiously basing its five year
development plan on the assumption of no major new oil
discoveries and of a gradual reduction of oil exports. Given
current growth in domestic oil consumption and projected oil
production levels, Tunisia should remain a net oil exporter only
through the remainder of the decade. More than 30 foreign
companies are involved in exploitation and development of
Tunisia's oil and gas fields. None of the oil exploration areas
are expected to contain large fields, but Tunisians hope that
they will be commercially exploitable.
The boundary dispute between Libya and Tunisia effecting
offshore oil exploration is now at a quiet stand-off. Although
the line proposed by the International Court of Justice (ICJ) has
not been officially recognized by Tunisia and Libya, oil firms
are now set to resume exploration and production plans based on
this line. On the Tunisian side of the ICJ line the fields
appear to be of only modest size at best. 25X1
Agriculture, which chronically lags behind the rest of the
economy and meets only 50 percent of domestic food consumption,
is one of the priority areas in current investment planning.
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Several institutional and policy measures, which affect producer
prices, credit facilities, and marketing cooperatives, have been
implemented recently to stimulate output. Projects are also
underway to expand irrigated areas and increase the use of
agricultural machinery.
Job creation is also a major concern. Current unemployment
is estimated at 12 percent with underemployment accounting for an
additional 12 percent. Economic investment is being directed
toward smaller, labor intensive enterprises, especially in the
lesser developed regions in order to create more jobs. The
traditional outlets for Tunisian labor in France and Libya have
not grown in recent years. Although efforts to place Tunisian
workers in the Gulf states have been made, results have been
limited so far. The slight warming in relations with Libya may
ease the unemployment burden somewhat in the near future, but
domestic employment will still lag behind targets.
With net oil exports declining, unemployment rising, and per
capita income now at levels which make it increasingly difficult
for Tunisia to obtain development assistance from traditional
donors at concessional terms, Tunisia is counting on recently
founded joint investment banks and direct foreign investment to
help finance its development. Overall investment levels so far
have been above target since the drive to encourage these joint
banks began. Tunisia has had to seek some additional financing
through the Euromarket as well, but its supply of investment
funds for the future looks healthy.
Outlook
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The Tunisian political and administrative system and economy
have several strengths which militate against prolonged domestic
unrest. The leadership is well-educated and pragmatic and
recognizes that it faces urgent problems. The current five-year
development plan, for example, is designed to ease unemployment,
an increasingly difficult political issue.
Nonetheless, the domestic scene will become more volatile
when Bourguiba is no longer President. Bourguiba's successor is
likely to encounter increasing demands to open up the political
system and to face far more criticism of his social and economic
policies. Although most opposition groups and figures are
expected to pursue their goals through legitimate channels, over
time their opposition could lead to a considerable weakening of
presidential power. Furthermore, a prolonged and divisive
succession period increases the possibility that the military may
intervene in politics for the first time.
Tunisia can be expected to identify less openly with the US
and assume a more pro-Arab and nonaligned foreign policy in the
post-Bourguiba era. It is unlikely, however, that Tunisia would
move close to the Soviets or grant them basing rights. Ties to
the US and Europe will remain important for defense support and
economic investment and trade. Despite the attraction of
improved economic cooperation with Libya in the post-Bourguiba
period, the Tunisian Government will remain wary of Libyan
subversion or interference as long as Mu'ammar Qadhafi is in
power in Tripoli.
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SUBJECT: Political and Economic Trends in Morocco and Tunisia
Orig. - Secretary of State
4 - CPAS/IMD/CB (no further dissem)
1 - C/PES
1 - D/NES E
2 - NESA/PPS
1 - NESA/AI
2 - NESA/AI/M
NESA/AI/ (2 Dec 83)
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