| | | | | | | COUNTRY PERSPECTIVES - TUNISIA | | Country presentation |
| | With its temperate climate, proximity to Europe, socio-political stability, and a fairly skilled labour force, Tunisia enjoys significant comparative advantages. Having opted early on for a market economy and progressive integration in the world economy, the country’s economic policy has succeeded in boosting private sector involvement... |
| | Latest News - Tunisia | | Latest Investments - Tunisia |  | Documents |  | | |  | | | | | Introduction |
With its temperate climate, proximity to Europe, socio-political stability, and a fairly skilled labour force, Tunisia enjoys significant comparative advantages. Having opted early on for a market economy and progressive integration in the world economy, the country’s economic policy has succeeded in boosting private sector involvement, diversifying its industrial base, and containing the social cost of structural adjustment, a pre-condition for political and social stability.
Tunisia was the first country (in 1995) to sign the free trade agreement with the European Union in the framework of the Euromed initiative. Between 1992 and 2004, Tunisia’s GDP rose by an average 4.1 percent, reaching a record 5.8 percent in 2004. The 2005 performance was for the most part positive (4.2 percent of GDP), despite tougher international competition and rising oil prices, sustained by favourable growth in service activities such as tourism (6.4 million tourists, TND2.563 million, some 12.5 percent of current revenues), air transport, telecommunications, and new technologies. For 2006, the latest estimates forecast GDP growth of 4.6 percent.
The manufacturing sector, in particular textile/clothing industries, has been the spearhead of Tunisia’s economic development since 1972, stimulated by a policy of foreign investment promotion and exports. 42 percent of overall manufacturing output is exported, thanks in particular to subcontracting activities. Manufacturing industries account for 20 percent of GDP and employ 20.5 percent of the labour force, whereas agriculture and fishing contribute for 14.3 percent of GDP and provide 22 percent of jobs and tourism generates 15.6 percent of GDP. The country counts more than 10,000 industrial companies.
A structural adjustment or "upgrading" programme has been introduced to improve the competitiveness of the manufacturing sector and related service companies in order to prepare companies for implementation of the free trade zone with the EU. In parallel, a strategy of export promotion was launched to strengthen export capacity at the company level. One component of this strategy is the institution of a documentation called the “single bundle” (liasse unique) for imports and exports. As early as 1989 the Government also set up a legislative framework for privatisation. There have been several reforms of the financial system, targeting sounder finances at banks and insurance companies and diversifying the range of financial products available to economic operators.
Thanks to a prudent monetary policy at the Central Bank of Tunisia (BCT), the inflation rate has fallen from 6.3 percent in 1995 to about 2 percent today. The Tunisian Dinar (TD) is convertible for current operations and a foreign exchange market was created recently, the objective being to reach total convertibility of the Dinar over the long term. Tunisia’s total national debt is projected at approximately US$ 16.3 billion for 2005 (57.6 percent of GDP) and its foreign debt is estimated at US$ 15.7 billion (54.9 percent).
As a result of its trade liberalisation policy, Tunisia has enjoyed dynamic exports, a narrowing of the trade deficit, and diversification of its export base. In 2005, the volume of trade reached TD 31 billion (EUR19 billion), despite difficult international economic conditions: an end to the multifibre agreement, soaring oil prices, and an economic downturn in Europe. The coverage rate of imports by exports increased from 69.6 percent in 2001 to 79.6 percent in 2005.
| | | | | Challenges |
Exogenous factors such as the European demand and the climatic risks strongly determine the trend of the growth.
An increased effort of investment and modernisation of the companies is essential to improve competitiveness of the Tunisian products, in particular in the textile sector.
The situation of the banking system remains fragile and reduces the access to credit for the companies.
Tunisia does not have many natural resources and is dependent on imports for its energy needs and thus on the world levels on oil.
Unemployment reaches 14.2% of the working population. It is accentuated by the arrival of many young graduates on the market. The principal challenge is to increase the current annual economic growth from at least 1-1.5% before 2010 in order to reduce the unemployment that the graduates are more and more facing. | | | | | Strong points |
The implementation of economic reforms attracts foreign investors. This policy is facilitated by the support of the European Union and of the international community.
The solvency of the country favours its access to the international capital markets.
The increasing diversification of the economy reinforces its resistance to the global economic situation.
Tunisia enjoys a strategic position in the Mediterranean. Tunis is at 2 hours flight in average from the main European capital cities.
A developed social system and an ambitious education policy aim at attenuating the social cost of the adjustment and at reinforcing the modernisation of the country.
Tunisia has a qualified, productive work force and competitive wages. Thanks to the reforms of the education, the new graduated arriving on the labour market represent more than half of the additional needs planned for the period 2002-2006.
In addition, the Finance law 2007 as well as measures in favour of technological innovation and economic competitiveness should create a very favourable environment for SMEs.
The government has indeed set the target of creating 70 000 companies by 2009. Two tools in particular were created at the end of 2006: the Bank of financing for small and medium companies (BFPME), aimed at focusing on innovative projects; and the Tunisian Company of guarantee (SOTUGAR) to secure the investors and guarantee the profitability of the projects. | | | | | References |
| Capital | Tunis | | Surface area | 162 155 km2 | | Population 2009 | 10 429 000 inhabitants (IMF) | | Languages | Arabic, French, English, Italian | | GDP 2009 (dollars) | US$ 39.7 bn (IMF) | | GDP per capita (dollars) | US$ 3 812 in 2009 (IMF) | | Currency | Tunisian Dinar (TND)
1 EUR=1.76 TND – 1US$ =1.31 TND | | Religion | Muslims (98%), Christians, Jews and others (2%) | | National holiday | 20th March (independence in 1956) | | Association Agreement with EU | Signed on 17 July 1995, implemented since March 1998.
EU web site:
http://www.deltun.ec.europa.eu/ | | WTO membership | Member since 1995 | | Sources: IMF, WDI 2006 and Consultations Article VI 2005, January 2005. | | | | |
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