Blueprint for wealth creation
Tunisia today is virtually unrecognisable from the country it was ten years ago. The economy has been growing
at an average of 5.8%, inflation has been pegged down to 3.1% (1998), the budget deficit has been whittled down
to 3% and is expected to hit a low of 2% by 2001, balance of payments deficit has stabilised at around 4.2% and
external debt is no more than 17% of exports.
The change goes beyond statistics and is visible. Tunis and other major towns, Sfax, Bizerte and Sousse are
spotless and function as efficiently as any Mediterranean European metropolis. Telecommunications and the postal
system have been rationalised and are the most efficient in Africa.
The biggest change however is in the demeanour of people. The last 10 years have brought more and more people
into the mainstream economy and Tunisia is now a true stakeholder society. The work culture has undergone a revolution
and gains in productivity over the last five years have added a very impressive 30% to GNP. The target is to increase
this figure to 40% by the end of the current development plan in 2001.
However, unemployment at 15% is still worrying the country's planners. "If we can achieve growth of around
7% per annum, we should reach full employment over the next decade," says Taoufik Baccar, the Minister for
Economic Development. Realistically though, the country has set itself a target of 6% per annum which will bring
unemployment figures down to single digit numbers.
Meanwhile, several measures have been instituted to alleviate poverty and create jobs. The National Solidarity
Fund has raised over $300m to provide decent amenities for marginalised groups and equip them with income generating
capacity. The newly created National Solidarity Bank gives promising entrepreneurs very soft start up loans.
Several infrastructure projects, hitherto the sole province of the state, are now being offered to local and
international firms. Labour intensive enterprises can obtain plots for a nominal sum of a little as TD10.
All this adds up to a very robust economy, ideally positioned, both in terms of capacity and geographical situation,
to confidently enter the euro zone in the first decade of the new millennium.
Tunisia's almost miraculous economic and social achievements since the change in 1987 are the result of "carefully
walking the tightrope between ambition on the one hand and caution on the other," says Mohamed Ghannouchi,
the Minister for International Cooperation and Investment.
"Right from the word go, when President Ben Ali assumed office, we set ourselves two main objectives: one,
to improve the living conditions of the people and create jobs, and second to catch up with the developed countries.
Both these objectives have been working in tandem over the last decade and I think we can claim a measure of success."
Linked to this was the need to liberalise what had been a very closed economy. "We set out to maintain
high growth and gradually integrate our economy into the global economy. This called for substantial reforms and
a period of adjustment, says Ghannouchi. "So far, we have been able to carry out reforms without either slowing
down growth or causing social unrest." Tunisia is currently ranked second to Mauritius as the most liberal
economy in Africa.
Lacking substantial natural resources such as oil or minerals, Tunisia set about making the most of whatever
advantage it had and also converting minuses into pluses. "Part of our strength lies in the fact that we do
not depend exclusively on the export of primary raw materials and do not suffer from excessive foreign debt. We
tend to depend on ourselves," says Taoufik Baccar, Minister for Economic Development.
This desire for self-sufficiency translates into the ingenious use and careful husbanding of whatever resources
are available. Take agriculture. Tunisia has only 5m hectares of arable land distributed over a wide area in the
north and central regions. Agriculture is very rain dependent and production can vary considerably year to year.
Nevertheless, Tunisia is virtually self-sufficient in cereals, edible oils, market vegetables and, last year, attained
self-sufficiency in milk and dairy products.
A series of cleverly contrived systems allows 340,000 hectares to be irrigated. "This is only 7% of the
total arable land but it produces 22% of our cereal output and as much as 85% of market fruit and vegetables,"
says Baccar. By 2006, an additional 60,000 hectares will be under irrigation. "Give me the Nile or the Mississipi
and I'll feed the world," says Badr Ben Ammar, Director of Planning in the Ministry of Agriculture.
Although Tunisia does not have the Nile, it has the desert. More than half the country is, in fact, desert.
This minus has been turned into a plus by aggressively developing tourism in the south. Several international films,
including Star Wars and The English Patient have been shot in the south. The revenue has been used to extend road
and air networks and support the construction of hotels and other tourist facilities. The desert is rapidly becoming
a 'must visit' destination for European and American tourists looking for something off the beaten track.
The bedrock of Tunisia's growth, what Investment Minister Mohamed Ghannouchi calls, "our greatest asset",
is the country's skilled labour force. "The best Tunisian investment has been educating its population since
independence," he says. "We have one of the highest educational levels in the region. There is one scientific
technician per 2,000 inhabitants - compatible with the rate in Malaysia. Tunisia has also, perhaps, the highest
rate of vocational training in Africa.
Given this base of a highly skilled and enterprising workforce, Tunisia has been able to build a formidable
manufacturing sector which today accounts for over 50% of exports. Although textiles and leather goods still dominate
the manufacturing sector, mechanical and electrical industries are coming rapidly to the fore and there is a thriving
computer software industry.
"Our economy is more diversified today. The mechanical and electrical industries are expanding at 7% per
annum, textiles at 6% and services, transport and especially telecommunications are all growing apace," says
Economic Development Minister Baccar.
Tunisia's low-key political profile in a volatile region, its internal stability and a long tradition of excellent
foreign relations have made it a natural choice for foreign investments and joint-ventures.
The foreign direct investment (FDI) stock at the end of 1996 was $10bn, half of which came in during the last
six years. In 1998, FDI inflow was $800m, $200m in hydrocarbons and $600m in other sectors. The rate of FDI inflows
is certain to increase the closer Tunisia gets to joining the European Free Trade Zone. With labour costs and salaries
worked out every three years between the trade unions, the employers associations and the state, Tunisia will be
a difficult site to ignore for investors looking to tap into a region that has a high-income population of over
350m.
What is Mohamed Ghannouchi's dream ten years from now? "A per capita GDP of $4,000 and virtually full employment,"
he replies.
Given Tunisia's track record over the last 10 years, this is one dream that seems certain to become a reality.
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