|Tunisia is in the process of economic reform and liberalization after
decades of heavy state direction and participation in the economy. Prudent
economic and fiscal planning have resulted in moderate sustained growth
for over a decade. Tunisia's economic growth historically has depended on
oil, phosphates, agriculture, and tourism. The government's economic
policies had limited success during the early years of independence.
During the 1960s, a drive for collectivization caused unrest, and farm
production fell sharply. Higher prices for phosphates and oil and growing
revenues from tourism stimulated growth in the 1970s, but an emphasis on
protectionism and import substitution led to inefficiencies. Tunisia
received considerable economic assistance during this period from the
United States and European and Arab countries and is one of the few
developing countries in the region to have moved into the "middle
As a result of an overvalued dinar and a growing foreign debt sparked a foreign exchange crisis in the mid-1980s. In 1986, the government launched a structural adjustment program to liberalize prices, reduce tariffs, and reorient Tunisia toward a market economy.
Tunisia's economic reform program has been lauded as a model by international financial institutions. The government has liberalized prices, reduced tariffs, lowered debt-service-to-exports and debt-to-GDP ratios, and extended the average maturity of its $10 billion foreign debt. Structural adjustment brought additional lending from the World Bank and other Western creditors. In 1990, Tunisia acceded to the General Agreements on Tariffs and Trade (GATT) and is a member of the WTO.
In 1996 Tunisia entered into an "Association Agreement" with the European Union (EU) which removes tariff and other trade barriers on most goods by 2008. In conjunction with the Association Agreement, the EU is assisting the Tunisian Government's Mise A Niveau (upgrading) program to enhance the productivity of Tunisian businesses and prepare for competition in the global marketplace.
The government has totally or partially privatized about 140 state-owned enterprises since the privatization program was launched in 1987. Although the program is supported by the UGTT, the government has had to move carefully to avoid mass firings. Unemployment continues to plague Tunisia's economy and is aggravated by a rapidly growing work force. An estimated 55% of the population is under the age of 25. Officially, 15% of the Tunisian work force is unemployed, but the real numbers of jobless or underemployed are higher.
In 1992, Tunisia reentered the private international capital market for the first time in 6 years, securing a $10-million line of credit for balance-of-payments support. Recent international operations include 50 billion Japanese Yen raised through a global samurai bond issue and 55 million Yen raised on the global samurai and Yen bond markets. Tunisia has gained investment grade ratings from several international institutions (Standard and Poors, Moody's, Fitch).
The stock exchange is under the control of the state-run Financial Market Council and lists nearly 50 companies. The government offers substantial tax incentives to encourage companies to join the exchange but expansion is still slow.
The Tunisian Government adopted a unified investment code in 1993 to attract foreign capital. More than 1,400 export-oriented joint venture firms operate in Tunisia to take advantage of relatively low labor costs and preferential access to nearby European markets. Economic links are closest with European countries, which dominate Tunisia's trade. Tunisia's currency, the dinar, is convertible for most commercial and investment transactions, but certain restrictions still limit operations carried out by Tunisian residents.
GDP: purchasing power parity -
$62.8 billion (2000 est.)
SOURCES: The World Factbook, U.S. Department of State
Mother Earth Travel > Country Index > Tunisia > Map Economy