A recent conference in Tunis hosted experts from a variety of backgrounds to discuss key issues concerning Tunisia’s transitional period. The seminar was organized by the Carnegie Middle East Center and the Association of Tunisian Economists (ASECTU). Lahcen Achy, a Carnegie economist, spoke alongside Ghazi Gherairi, a law professor and member of the High Council for the Realization of the Goals of the Revolution; Mohamed Haddar, president of the Association of Tunisian Economists; and Ghazi Boulila, advisor to the Minister for Regional Development. Ridha Gouia, secretary general of the Association of Tunisian Economists, said that beyond short term concerns, it is essential to promote a long term vision for Tunisia. People's confidence in the state must be restored, and a concerted effort is needed to repair the relationship between state institutions and the citizen. He emphasized that radical changes to the judicial, fiscal, financial, industrial and agricultural sectors are an absolute must.
Key Questions for Tunisia’s Economy
Achy’s opening remarks stated that the Tunisian Revolution presented a historic opportunity to reevaluate the theory and practice of development raising three critical questions
- Which model of economic development should Tunisia follow? Tunisia must choose between a market economic model, characterized by minimal state involvement, or a model with greater emphasis on welfare, in which case the role of the state will be considerable. Tunisia may be tempted to take a specific country as a model; but each country has its own unique set of circumstances. Hence, the challenge for Tunisia is to develop its own model -- and in this task, the role of think tanks and forums for dialogue between the various components of Tunisian society should play a fundamental role.
- What kind of economic growth should Tunisia promote? Certainly, promoting economic growth is a priority nevertheless Achy insisted that growth alone would not suffice. Policymakers must ensure mechanisms for social inclusion are part of the country's economic development. 'Inclusive growth' should be based on policies which promote equal opportunities and equal access to services such as education and health care, as well as market access to goods and services, credit and employment. According to Achy, it should also encompass appropriate redistribution policies, in order to ensure the equitable allocation of public expenditures and the sharing of tax burden.
- How should the State's role be defined? Undeniably, the State has an essential role to play in terms of service provision, regulation and the guarantee of property rights. Achy emphasized that the State should promote research and development and encourage innovation; at the same time, however, it must refrain from giving direct aid to companies.
Political Challenges during Transition
Gherairi highlighted several important points regarding the political aspects of Tunisia's revolution.
- Reflecting on the use of concepts: The word 'challenges' tends to connote externality; but the Tunisian revolution is a domestic affair, as are its challenges. To be more precise, Gherairi suggested that a 'challenge' could be defined as the sum of the uncertainties Tunisia would encounter on its path towards reform.
- Rewriting the Social Contract: Election Day, October 23rd, is a crucial moment pending at the “technical, political, and even civilizational” levels, according to Mr. Gherairi. The constitution is not an end in itself, but a means for Tunisians to collectively write their own future; this is an indispensable prerequisite for socio-economic development.
- Creating a Culture of Ethical Politics: It is vital that effective mechanisms be put in place to 'purify' a system which has been plagued by corruption, explained Gherairi. It is imperative that good governance and transparency are promoted, in order to ensure responsible public spending; the emergence of a viable political opposition; and open access to information for the people.
Prospects for the Job Market
Haddar discussed the outlook for the country’s job market noting that despite a relatively satisfactory level of economic growth, Tunisia has never really managed to reduce its unemployment rate.
- A constantly increasing demand for jobs: Each year about 80,000 new job seekers enter the Tunisian labor market. Knowing this, it is natural to expect that pressures on the market are likely to remain high over the short term. Increased female participation in economic activity also tends to raise the overall number of the unemployed. Additionally, the structure of demand for jobs is changing, with a greater proportion of the labor market made up of graduates with some holding post-secondary degree. This represents a major economic challenge for Tunisia in the years to come.
- A Weak and Volatile Job Market: The job opportunities currently available in the Tunisian economy are insufficient to accommodate the influx of new job seekers. However, the severity of this imbalance differs according to gender, age, qualifications, and region. Today, Haddar specified, young graduates from disadvantaged areas are the worst affected.
- Possible New Directions for the Job Market: As described by Haddar, the current situation is not sustainable. Improving Tunisia's competitiveness would help promote its integration into the global economy, in turn improving economic indicators. Bolstering the private sector, both local and international, is equally necessary. Haddar further suggested that potential solutions could involve collaboration between public and private sector stakeholders, in addition to an emphasis on promoting innovation and research.
Addressing Challenges for Regional Development
Ghazi, advisor to the Minister of Regional Development, Abderrazak Zouari, discussed a white paper being prepared by the ministry which provides a detailed and carefully researched vision of regional development in Tunisia. Boulila set out four policy priorities designed to encourage equal levels of development throughout the country and combat the grave disparities between developed and disadvantaged regions.
- Improving the business climate to attract new investment: This would allow for the development of disadvantaged areas in the country's hinterlands, in terms of health, education, infrastructure, and access to clean water and electricity.
- Connecting underdeveloped regions to advanced ones: Geographical proximity may enable some disadvantaged areas to benefit from the 'ripple effect' moving more developed neighboring regions outward. The improvement of transport infrastructure, in particular the rail network, is essential for opening up the poorest regions, said Boulila.
- Facilitating regional economic development without resorting to subsidies: This measure applies to all resource-rich areas of the country which may be of interest to the private sector. It is intended to attract foreign investment.
- Improving Governance: Good governance at the local level, for example, the establishment of a democratically elected regional council chaired by a regional governor - constitutes another important aspect of regional development. According to Boulila, improved governance would empower the country's regions and lead to a better allocation of resources.
These presentations gave rise to a versatile and productive discussion involving journalists, political party representatives, academics, senior government officials, and representatives of business and industry. The revolution may have laid the foundation for change but the road ahead remains long and difficult. Gouia, who moderated the debate, concluded that dialogue and debate between all elements of Tunisian society are indispensable to the process of building a prosperous and inclusive Tunisia which takes full advantage of its strengths.