Tunisia Economy

the Tunisian banks

The economic system and its sectors

Tunisia is a largely free market economy, with competition having been severely restricted in recent years due to the increasing influence of the family of the ousted President Ben Ali. Almost all major companies and sectors were controlled by this group. Energy and water supply, local public transport and the post office are state-owned, and the telecommunications sector has been gradually opened up over the past ten years. Fuels and basic foodstuffs are subsidized (including bread, milk, sugar, flour and tomato paste) and are not allowed to be exported. However, smuggling to and from Libya and Algeria mainly takes place in the south and in the Region of Kasserine plays an important role. Increased border security measures to stop it, however, carry a great risk of social instability, according to researchers. Corruption still pervades large parts of the economy and customs. Only the current government began cautiously to crack down on corruption in 2017. Along with corruption, bureaucracy is one of the greatest obstacles to development.

In addition to mining, which is one of the most important sectors of the Tunisian economy, agriculture, textile manufacturing and tourism play an important role in the Tunisian economy. Almost 20% of employees work in agriculture. Olive oil and dates are the main export products in this area. around a third of the employees work in industry and half in the service and tourism sector. This ratio has been largely stable since 2005. In terms of service, call centers of French companies and IT companies outsourced to Tunisia play a major role. In addition, since 2011, are based more and more start-ups, a GTAI report. A law to promote them was passed in 2018, but its implementation has been criticized.

According to franciscogardening, foreign direct investment accounts for the largest part of Tunisia’s gross domestic product. 85% of Tunisian companies are active in the informal sector, according to a study by the business association UTICA. They generate around 115 billion US dollars, more than six times the Tunisian budget. Remittances by Tunisians from abroad amounted to RSD 2.6 billion in 2018. The negative trade balance of recent years has posed a major challenge.

In addition to dates, the most important export product, Tunisia primarily produces and exports olives. Record sales were achieved in 2015. Slowly he also takes organic products in Tunisia, however, the expensive certification for the European market is an economic obstacle for many smaller farms.

Economic indicators, analysis, statistics

The most up-to-date figures on the Tunisian economy are published on the website of the National Statistics Institute – but the information about the time before the revolution should be treated with caution. In addition, the German-Tunisian Chamber of Commerce and Industry and the GTAI publications and data sheets provide a good overview. Further information on the economy and development can be found on the website of the International Monetary Fund. The EU provides an overview of its relations with Tunisia on its website. A detailed infographic of the Carnegie Endowment and a report from the OECD provides an overview of socio-economic trends since 2011.

the Tunisian banks

Impact of the revolution on the Tunisian economy

The revolution has had a massive impact on the Tunisian economy. In spite of the generally positive framework conditions, many foreign investments failed to materialize because of the initially unstable security situation and unclear political progress, tourism collapsed and many Tunisian companies have been on strike regularly since January 2011, some factories have been idle for months. The economic loss was estimated at 2.6 billion euros in the first quarter of 2011 alone. Economic growth has collapsed since the upheaval. In 2015 the growth rate was around 0.5% and increased to 2% economic growth by 2017. The Tunisian dinar slumped massively after 2011 and the purchasing power of the population fell sharply.

The companies belonging to the family of the ousted president have been expropriated by the transitional government and given to trustees. In the long term, these are to be privatized again. Valuables found in the confiscated villas of the presidential family have been auctioned since December 2012, but the proceeds are lower than initially hoped. In 2015, an impunity bill for corrupt Ben Ali-era businesspeople caused a stir. Critics accuse the government of sabotaging the truth commission, which is actually also responsible for dealing with economic crimes.

In addition to the significant losses, the Tunisian revolution also offers long-term opportunities for the Tunisian economy. The quasi-monopolies of the presidential clan are disappearing, and foreign investors who shied away from investing in Tunisia due to a lack of legal certainty or were deterred by the government from investing in Tunisia are now starting to establish themselves in the market. However, the German companies already based in Tunisia remain loyal to the country despite the difficult political situation, as a study by the German-Tunisian Chamber of Commerce shows.

The political events in Libya also have an impact on the neighboring country’s economy and pose additional challenges to Tunisia, such as an African Development Bank report sets out. With inflation of 6%, massive foreign debt, declining foreign exchange reserves and rising food prices, Tunisia has been slipping more and more into the crisis since 2012. The country is increasingly of loans from international organizations such as the International Monetary Fund depends. This is often criticized by the population. At the same time, Tunisian households are becoming increasingly indebted.

The economic influence of the Gulf States on Tunisia has increased since 2011.

Tunisia assumes that the economy will collapse by at least 7% as a result of the corona crisis.