Breaking with the Past to Unleash the Potential of the Tunisian Economy
17 September 2014
Read by 1597 persons
If Tunisia does not change its economic model, it risks being trapped in a cycle of low growth and high unemployment, according to the latest World Bank (WB) report entitled "The Unfinished Revolution - Creating Opportunities, Quality Jobs and Wealth for all Tunisians".
"Tunisia's economic legacy prevents the country from developing its immense potential and highlights the urgent need to adopt a more open growth model to ensure the success of the transition," underlines the new report, which is the first comprehensive study of the Tunisian economy carried out by the World Bank since the 2011 revolution.
"The good news is that Tunisia's workforce, which consists of a well-trained youth, is the key element on which to build shared prosperity," says Inger Andersen, Vice-President of the Middle East and North Africa region.
The two World Bank economists and authors of the report, Antonio Nucifora and Bob Rijkers, consider that Tunisia's investment policy is an excellent example of a well-intentioned economic policy that has not yielded the expected results: creating quality jobs and making Tunisia more competitive globally.
Furthermore, a vast part of the country's economy remains largely closed to competition. While the generally held view is that this helps protect Tunisian businesses, the reality is that this situation mainly benefits a small group of individuals.
This is why Tunisian exports have increased over the past two decades without evolving at the same rate as those of other emerging countries, the authors of the report point out.
And they add that the sector has in fact struggled to move beyond the threshold of low value-added production and poorly paid jobs. Today, the challenge facing Tunisia is to attract more investment and create more and better-paid jobs for well-trained young graduates who, all too often, remain on the margins of the economy.
"Tunisia has more to offer than low-paying and precarious jobs," says Antonio Nucifora, adding that this study shows that removing some of the barriers that limit the participation of new businesses in economic activity, coupled with increased competition, could more than double the number of jobs created, with an additional contribution of over 100,000 additional jobs per year, making Tunisia the "Tiger of the Mediterranean".
The report also indicates that lifting restrictions imposed on businesses at entry and simplifying the regulatory framework within which they operate could help increase and accelerate job creation, at a rate of 50,000 jobs per year.
Tunisian businesses currently dedicate nearly 18% of their annual turnover to bureaucratic red tape and related petty corruption practices.
In parallel, banking sector reform could release up to $10 billion in financing for Tunisian businesses over a ten-year period, creating some 38,000 new jobs per year, the authors of the report reveal.
Reform of industrial policy and the agriculture and services sectors could also lead to the creation of additional jobs. "Tunisia is going through a historic transition, but its economic model is no different from what existed before the revolution," according to World Bank economist Bob Rijkers.
"Above all, this report is an invitation to rethink the Tunisian economic development model and to question the current assumptions underlying the types of reforms likely to accelerate growth, stimulate shared growth, create quality jobs and promote regional development," he concluded.
DI with TAP
Webmanagercenter.com
Published on September 16, 2014.
Posted online on September 17, 2014.
"Tunisia's economic legacy prevents the country from developing its immense potential and highlights the urgent need to adopt a more open growth model to ensure the success of the transition," underlines the new report, which is the first comprehensive study of the Tunisian economy carried out by the World Bank since the 2011 revolution.
"The good news is that Tunisia's workforce, which consists of a well-trained youth, is the key element on which to build shared prosperity," says Inger Andersen, Vice-President of the Middle East and North Africa region.
The two World Bank economists and authors of the report, Antonio Nucifora and Bob Rijkers, consider that Tunisia's investment policy is an excellent example of a well-intentioned economic policy that has not yielded the expected results: creating quality jobs and making Tunisia more competitive globally.
Furthermore, a vast part of the country's economy remains largely closed to competition. While the generally held view is that this helps protect Tunisian businesses, the reality is that this situation mainly benefits a small group of individuals.
This is why Tunisian exports have increased over the past two decades without evolving at the same rate as those of other emerging countries, the authors of the report point out.
And they add that the sector has in fact struggled to move beyond the threshold of low value-added production and poorly paid jobs. Today, the challenge facing Tunisia is to attract more investment and create more and better-paid jobs for well-trained young graduates who, all too often, remain on the margins of the economy.
"Tunisia has more to offer than low-paying and precarious jobs," says Antonio Nucifora, adding that this study shows that removing some of the barriers that limit the participation of new businesses in economic activity, coupled with increased competition, could more than double the number of jobs created, with an additional contribution of over 100,000 additional jobs per year, making Tunisia the "Tiger of the Mediterranean".
The report also indicates that lifting restrictions imposed on businesses at entry and simplifying the regulatory framework within which they operate could help increase and accelerate job creation, at a rate of 50,000 jobs per year.
Tunisian businesses currently dedicate nearly 18% of their annual turnover to bureaucratic red tape and related petty corruption practices.
In parallel, banking sector reform could release up to $10 billion in financing for Tunisian businesses over a ten-year period, creating some 38,000 new jobs per year, the authors of the report reveal.
Reform of industrial policy and the agriculture and services sectors could also lead to the creation of additional jobs. "Tunisia is going through a historic transition, but its economic model is no different from what existed before the revolution," according to World Bank economist Bob Rijkers.
"Above all, this report is an invitation to rethink the Tunisian economic development model and to question the current assumptions underlying the types of reforms likely to accelerate growth, stimulate shared growth, create quality jobs and promote regional development," he concluded.
DI with TAP
Webmanagercenter.com
Published on September 16, 2014.
Posted online on September 17, 2014.
