The tiny Mediterranean nation is benefiting greatly from foreign investment. While global FDI was down 10% in the year 2008, in Tunisia is increased by 38%.

Besides the scenic beaches and Arab-Mediterranean cuisine, Tunisia offers skilled work force, first-class infrastructure, stability, a proper courts system, and a somewhat prime location.

[It will require more than just ads to increase growth.]

Foreign investment has grown so much in the past few years, that the nation has been dubbed the “Dubai of the Mediterranean.” I, for one, hope Tunisian continues to prosper but not like in Dubai fashion.

The country is attracting top clients. Cisco has announced plans to open up an office in Tunisia and Airbus this year will christen a new factory in the country.

Car assemble plants, financed by the Japanese among others, have become a big part of the local economy.

The economy if humming along pretty well, especially in comparison to the rest of the region. But domestic bosses still complain about the lack of capital to finance expansions and half of college graduates cannot find work within a year.

The official employment rate is 14%, unofficially it may be as high as 20%. Youth unemployment is far higher.

The government has been trying to attract more FDI by, for instance, ending initial taxation for foreign companies. But more than that the nation needs to spur entrepreneurship by restructuring the tax code [which is too complex] and making it easier to obtain a business license [which taxes too much time].

Then there is also the matter of official corruption. It is a well-known “secret” that the in-laws of President Ben Ali are operating a Mafia within the country. Private businesses are forced to cede some of their profits, thus undermining future investment for the selfish interest of a unhinged elite. It is incredibly that the Trabelsi family is allowed to operate like this. Corruption will most likely not be at the top of the Ben Ali’s agenda when they sit down once again and figure out how to increase economic productivity.