The Unfinished Revolution : Bringing Opportunity, Good Jobs and Greater Wealth to All Tunisians
Until 2010 Tunisia appeared to be doing well and was heralded by the World Bank and the IMF as a role model for other developing countries, and the World Economic Forum repeatedly ranked Tunisia as the most competitive economy in Africa. Yet, the T...
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| Format: | Economic & Sector Work |
| Language: | English en_US |
| Published: |
Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2014/05/20211980/unfinished-revolution-bringing-opportunity-good-jobs-greater-wealth-all-tunisians http://hdl.handle.net/10986/20267 |
| Summary: | Until 2010 Tunisia appeared to be doing
well and was heralded by the World Bank and the IMF as a
role model for other developing countries, and the World
Economic Forum repeatedly ranked Tunisia as the most
competitive economy in Africa. Yet, the Tunisian model had
serious flaws. Inadequate creation of jobs, notably for
university graduates, and deep regional disparities were a
source of increasing frustration across the country in the
run up to the January 2011 Revolution. This development
policy review shows that, in contrast to the façade often
presented by the former regime, Tunisia's economic
environment was and remains deeply deficient. The review
highlights an economy that has remained frozen in low-value
added activities and where firms are stagnating in terms of
productivity and jobs creation. The review argues that
Tunisian prosperity has been held back by policies that have
reduced the country s overall economic performance. This
poor performance results from extensive barriers to entry
and market restrictions coupled with a heavy business
regulations and a poorly functioning financial system, have
resulted in economic stagnation. Economic policies have
exacerbated cronyism and rent-seeking, allowing
under-performing firms to survive, regardless of their
productivity. in order to fulfill its economic potential,
Tunisia needs to create a level playing field by opening up
the economy and removing Tunisia's three dualisms,
namely the onshore-offshore division, the dichotomy between
the coast and the interior, and the segmentation of the
labor market. A strong social policy is also necessary, of
course, and should be designed to accompany private
sector-led growth. Tunisia can capitalize on a strong
competitive advantage to export wage-intensive goods, expand
its export of services, and unleash the potential of
agriculture, to the benefit of small businesses, young
graduates, and farmers in Tunisia's long-neglected
interior regions. Realizing these benefits will require
improving the investment climate, rationalizing regulations,
and developing more equitable development policies that
benefit all of Tunisia's regions. The Unfinished
Revolution is a challenge for policymakers to rethink
Tunisia's economic development model, to question
existing assumptions, and to dare to think big about policy
reforms which can accelerate growth and shared prosperity,
create quality jobs and promote regional development. |
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