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Fri. Nov. 5, 1999
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Muslim Affairs > Africa > Politics & Economy
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Tunisia's Economy: Privatization With A Governmental Outlook
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The textile and clothing industry in Tunisia:
Tunisia is Europe's fifth-largest supplier of wearing
apparel and its fifth-largest customer for textiles.
Of the 2,000 plants in operation, 1,300 produce
solely for export. |
to attract foreign investors in its ongoing strive towards privatization.
Tunisian President, Zin Abidine Ben Ali, is more than certain that his victory will be an overwhelming one. Ben Ali, backed by a powerful party that possesses 144 seats of the 163-member parliament, secured 99.91 percent of the vote in the last elections. Observers say that the foreseen economic prosperity under Ben Ali's rule is an indication that most Tunisians associate his presidency with prosperity and improving economic conditions.
Since he became a President over ten years ago, Ben Ali adopted the 'opening of the economy' policy. The Tunisian economy succeeded thereafter to survive the proposed threat of the neighboring European markets. 96 percent of Tunisian products are said to have attained the capabilities to compete in international markets and on many occasions, have won the race.
1998 was the year in which the Tunisian GNP increased by 5.4 percent; a growth viewed as substantial for a country whose economy was for a long time held hostage to centralized planning.
The Tunisian government continues to use limited protectionism to ensure the continuation of important local industry and to safeguard its workforce until the economic transition is complete. While many are expected to lose their jobs in the public sector following privatization, over 931 programs were set to provide these people with guidance, instructions and work opportunities in small and mid size businesses. Although installing and financing these programs is a costly procedure that will raise government spending to a maximum, these programs are anticipated to only be temporary projects that end once a safe reformation of the economy is achieved. Tunisian experts are indicating that the rate of unemployment will sink dramatically to 12.2 percent by 2001 and to 10.2 percent by 2006.
The slight recorded increase in the budget deficit between the first 9 months of 1999 and the first 9 months of 1998 has aroused worries that privatization has reached its limitation. On the contrary, say Tunisian officials. The government is promising that further privatization in the next year will eliminate over 43 percent of the total deficit. Several factors have served the Tunisian's successful experience with privatization, which indeed makes it unique amongst other third world countries.
First, Tunisia didn't struggle so much in repairing what the former economic approach has cost its economy. Even under the centralized government, the losses were not too significant to adjust, for the active trade route with Europe has created a safety net that softened the failures of the public sectors' zeal.
Second, the country has several economic outlets, although modest ones. Tunisia's economy has survived the hard hitting price-drops that other third world countries have experienced, especially oil exporting counties. Such diversity has strengthened the Tunisian economy's endurance, which has made the small North African nation less vulnerable to economic and political instability.
Third, the Tunisian approach toward privatization followed a healthy method. This helped secure and protect the public sector's workforce while attracting foreign investors to boost the private sectors' performance. At the same time, the government used modest precautions to push local products ahead in the fierce competition. That largely contributed to the strong start of local Tunisian manufactured products within international markets.
Finally, Tunisia's economy is moving in several directions, with a friendly outlook rather than a confrontational approach. It was the first country south of the Mediterranean to sign a joint cooperation treaty with the European union, therefore expanding its import and export operation with Europe. Tunisia is working toward achieving stronger economic ties with its Arab neighbors through the creation of free trade zones. Consequently, Tunisia will successfully avoid falling in the swamp of dependence and reliance, the way other countries have.
There is no doubt that Tunisia has a long way to go before a solid economic foundation is constructed. At the same time, there is no doubt in the efficiency of such a formula, especially when the welfare of the people becomes the basis for such a foundation. Yet, in order for Tunisia's economic gains to be in ceaseless motion, the balance must remain between privatization and governmental supervision with moderate control over certain aspects of the economy. Moreover, securing the future of those who lose their jobs to the private sector must always remain within the government's uppermost priorities
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Ramzy Baroud is a veteran Arab-American journalist and the editor in chief of the Palestine Chronicle. He currently teaches mass communication at Australia’s Curtin University of Technology, Malaysia Campus. Baroud is also former head of Aljazeera.net English’s Research and Studies department. He is the author of the forthcoming book Writings on the Second Palestinian Uprising: A Chronicle of a People’s Struggle (Pluto Press, London).
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