Promoting economic development in Tunisia
Examining options for economic development programming
Four years after the fall of the Ben Ali regime Tunisia’ continues to be seen as the success story of the Arab Spring. However, it faces an array of challenges. While the 2015 terrorist attacks against the Bardo Museum and on a resort in Sousse had an immediate and tragic human impact they also contributed to a worsening economic situation for ordinary Tunisians.
The reduction in tourism numbers in the wake of the attacks, combined with the slow pace of economic reform have resulted in growth dropping below 1% and undermined efforts to bring down unemployment (which sits at around 15% overall, and much higher amongst youth). The interlinkages between insecurity and economic woes go in both directions and represent a fundamental threat to the future success of Tunisia’s democratic transition.
In early 2016 Adam Smith International conducted an assessment of the state of the Tunisian economy. The assessment identified a range of troubling economic indicators in post-revolutionary Tunisia, including slow GDP and wage growth, high unemployment (particularly amongst the young) and continued severe economic inequality between regions.
Key structural weaknesses identified as contributing to this disappointing economic performance included financial sector fragility, labour market inflexibility, infrastructure gaps, weaknesses in the business environment and weaknesses in government delivery systems.
The report provided a range of recommendations which could help the Tunisian Government to overcome these weaknesses in order to improve economic outcomes and reduce drivers of instability.