Tunisia

Tunisia

Tunisia , officially the Tunisian RepublicThe long name of Tunisia in other languages used in the country is: , is the northernmost country in Africa. It is a Maghreb country and is bordered by Algeria to the west, Libya to the southeast, and the Mediterranean Sea to the north and east. Its area...

is in the process of economic reform and liberalization

Liberalization

In general, liberalization refers to a relaxation of previous government restrictions, usually in areas of social or economic policy. In some contexts this process or concept is often, but not always, referred to as deregulation...

 after decades of heavy state direction and participation in the economy. Prudent economic and fiscal planning have resulted in moderate but sustained growth for over a decade. Tunisia's economic growth historically has depended on oil

Petroleum

Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...

, phosphate

Phosphate

A phosphate, an inorganic chemical, is a salt of phosphoric acid. In organic chemistry, a phosphate, or organophosphate, is an ester of phosphoric acid. Organic phosphates are important in biochemistry and biogeochemistry or ecology. Inorganic phosphates are mined to obtain phosphorus for use in...

s, agri-food products, car parts manufacturing, and tourism

Tourism in Tunisia

Among Tunisia's tourist attractions are its cosmopolitan capital city of Tunis, the ancient ruins of Carthage, the Muslim and Jewish quarters of Jerba, and coastal resorts outside of Monastir...

. In the World Economic Forum 2008/2009 Global Competitiveness Report, the country ranks first in Africa

Africa

Africa is the world's second largest and second most populous continent, after Asia. At about 30.2 million km² including adjacent islands, it covers 6% of the Earth's total surface area and 20.4% of the total land area...

 and 36th globally for economic competitiveness, well ahead of Portugal (43), Italy (49) and Greece (67).

Historical trend

Current GDP per capita soared by 380% in the Seventies. But this proved unsustainable and it collapsed to a paltry 10% in the turbulent Eighties rising to a modest 36% in the Nineties signifying the impact of successful diversification.

This is a chart of trend of gross domestic product of Tunisiahttp://www.imf.org/external/pubs/ft/weo/2006/01/data/dbcselm.cfm?G=2001 (estimated) by the International Monetary Fund with figures in millions of Tunisian Dinars.

Year	Gross Domestic Product (Constant Prices - Billions)	US Dollar Exchange (PPP)	Inflation Index (2000=100)	Per Capita Income (as % of USA)
1980	7.620	0.244 Tunisian Dinars	29	11.16
1985	9.358	0.305 Tunisian Dinars	46	6.59
1990	10.816	0.347 Tunisian Dinars	65	6.50
1995	13.074	0.401 Tunisian Dinars	85	7.36
2000	17.181	0.440 Tunisian Dinars	100	5.85
2005	21.372	0.437 Tunisian Dinars	114	6.89
2007	23.966	0.439 Tunisian Dinars	120

For purchasing power parity comparisons, the US Dollar is exchanged at 0.44 Tunisian Dinars only. Mean wages were $4.17 per manhour in 2009.

Growing foreign debt and the foreign exchange

Foreign exchange market

The foreign exchange market is a global, worldwide decentralized financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends...

 crisis in the mid-1980s. In 1986, the government launched a structural adjustment

Structural adjustment

Structural adjustments are the policies implemented by the International Monetary Fund and the World Bank in developing countries. These policy changes are conditions for getting new loans from the International Monetary Fund or World Bank, or for obtaining lower interest rates on existing loans...

 program to liberalize prices, reduce tariff

Tariff

A tariff may be either tax on imports or exports , or a list or schedule of prices for such things as rail service, bus routes, and electrical usage ....

s, and reorient Tunisia toward a market economy

Market economy

A market economy is an economy in which the prices of goods and services are determined in a free price system. This is often contrasted with a state-directed or planned economy. Market economies can range from hypothetically pure laissez-faire variants to an assortment of real-world mixed...

.

Tunisia's economic reform program has been lauded as a model by international financial institutions

International financial institutions

International financial institutions are financial institutions that have been established by more than one country, and hence are subjects of international law. Their owners or shareholders are generally national governments, although other international institutions and other organisations...

. The government has liberalized prices, reduced tariffs, lowered debt-service-to-exports and debt-to-GDP

Gross domestic product

Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....

 ratios, and extended the average maturity of its $10 billion foreign debt. Structural adjustment brought additional lending from the World Bank

World Bank

The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

 and other Western creditors. In 1990, Tunisia acceded to the General Agreement on Tariffs and Trade

General Agreement on Tariffs and Trade

The General Agreement on Tariffs and Trade was negotiated during the UN Conference on Trade and Employment and was the outcome of the failure of negotiating governments to create the International Trade Organization . GATT was signed in 1947 and lasted until 1993, when it was replaced by the World...

 (GATT) and is a member of the World Trade Organization

World Trade Organization

The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...

 (WTO).

In 1996 Tunisia entered into an "Association Agreement" with the European Union

European Union

The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...

 (EU) which removes tariff and other trade barrier

Trade barrier

Trade barriers are government-induced restrictions on international trade. The barriers can take many forms, including the following:* Tariffs* Non-tariff barriers to trade** Import licenses** Export licenses** Import quotas** Subsidies...

s 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 around 160 state-owned enterprises since the privatization

Privatization

Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector to the private sector or to private non-profit organizations...

 program was launched in 1987. Although the program is supported by the GATT, the government has had to move carefully to avoid mass firings. Unemployment

Unemployment

Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...

 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, 14% of the Tunisian work force is unemployed.

External trade and investment

In 1992, Tunisia re-entered the private international capital market for the first time in 6 years, securing a $10-million line of credit for balance-of-payments support. In January 2003 Standard & Poor's

Standard & Poor's

Standard & Poor's is a United States-based financial services company. It is a division of The McGraw-Hill Companies that publishes financial research and analysis on stocks and bonds. It is well known for its stock-market indices, the US-based S&P 500, the Australian S&P/ASX 200, the Canadian...

 affirmed its investment grade credit ratings for Tunisia. The World Economic Forum

World Economic Forum

The World Economic Forum is a Swiss non-profit foundation, based in Cologny, Geneva, best known for its annual meeting in Davos, a mountain resort in Graubünden, in the eastern Alps region of Switzerland....

 2002-03 ranked Tunisia 34th in the Global Competitiveness Index Ratings (two places behind South Africa

South Africa

The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...

, the continent's leader). In April 2002, Tunisia's first US dollar

United States dollar

The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....

-denominated sovereign bond issue since 1997 raised $458 million, with maturity in 2012.
The Bourse de Tunis

Bourse de Tunis

The Bourse des Valeurs Mobilières de Tunis or Bourse de Tunis is a stock exchange based in Tunis, Tunisia. It was founded in 1969, and currently lists around 50 stocks....

 is under the control of the state-run Financial Market Council and lists over 50 companies. The government offers substantial tax incentives to encourage companies to join the exchange, and expansion is occurring.

The Tunisian government adopted a unified investment code in 1993 to attract foreign capital. More than 1,600 export-oriented joint venture

Joint venture

A joint venture is a business agreement in which parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets...

 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

Currency

In economics, currency refers to a generally accepted medium of exchange. These are usually the coins and banknotes of a particular government, which comprise the physical aspects of a nation's money supply...

, the dinar, is not traded outside Tunisia. However, partial convertibility exists for bonafide commercial and investment transaction. Certain restrictions still limit operations carried out by Tunisian residents.

The stock market capitalisation of listed companies in Tunisia was valued at $5.3 Billion in 2007, 15% of 2007 GDP, by the World Bank

World Bank

The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

http://web.worldbank.org/WBSITE/EXTERNAL/DATASTATISTICS/0,,contentMDK:20394793~menuPK:1192714~pagePK:64133150~piPK:64133175~theSitePK:239419,00.html.

For 2007, foreign direct investment totaled TN Dinar 2 billion in 2007, or 5.18% of the total volume of investment in the country. This figure is up 35.7% from 2006 and includes 271 new foreign enterprises and the expansion of 222 others already based in the country.

The economic growth rate seen for 2007, at 6.3% is the highest achieved in a decade.

Economic data

GDP: purchasing power parity - $77.00 billion (2007 est.)

GDP - real growth rate: 6.3% (2007 est.)

GDP - per capita: purchasing power parity - $7,473 (2007 est.)

GDP - composition by sector:

agriculture: 11.6%

industry: 25.7%

services: 62.8% (2007 est.)

Population below poverty line: 7.4% (2005 est.)

Household income or consumption by percentage share:

lowest 10%: 2.3%

highest 10%: 31.5% (2000)

Inflation rate (consumer prices): 3.1% (2007 est.)

Labor force: 3.593 million (2007 est.)

note: shortage of skilled labor

Labor force - by occupation: services 55%, industry 23%, agriculture 22% (1995 est.)

Unemployment rate: 14.1% (2007 est.)

Ease of Doing Business Rank: 55th

Budget:

revenues: $6.101 billion

expenditures: $6.855 billion, including capital expenditures of $1.6 billion (2003 est.)

Industries: Petroleum, mining (particularly phosphate and iron ore), tourism, textiles, footwear, agribusiness, beverages

Industrial production growth rate: 7.2% (2007 est.)

Electricity

• Production: 12.85 Billion kWh (2005)
• Production by source:
  • fossil fuel: 99.5%
  • hydro: 0.5%
  • nuclear: 0%
  • other: 0% (1998)
• Consumption: 11.17 billion kWh (2005)
• Exports: 0 kWh (2005)
• Imports: 0 kWh (2005)

Agriculture

Agriculture - products: olive

Olive

The olive , Olea europaea), is a species of a small tree in the family Oleaceae, native to the coastal areas of the eastern Mediterranean Basin as well as northern Iran at the south end of the Caspian Sea.Its fruit, also called the olive, is of major agricultural importance in the...

s, grain

Cereal

Cereals are grasses cultivated for the edible components of their grain , composed of the endosperm, germ, and bran...

, dairy

Dairy

A dairy is a business enterprise established for the harvesting of animal milk—mostly from cows or goats, but also from buffalo, sheep, horses or camels —for human consumption. A dairy is typically located on a dedicated dairy farm or section of a multi-purpose farm that is concerned...

 products, tomato

Tomato

The word "tomato" may refer to the plant or the edible, typically red, fruit which it bears. Originating in South America, the tomato was spread around the world following the Spanish colonization of the Americas, and its many varieties are now widely grown, often in greenhouses in cooler...

es, citrus fruit, beef

Beef

Beef is the culinary name for meat from bovines, especially domestic cattle. Beef can be harvested from cows, bulls, heifers or steers. It is one of the principal meats used in the cuisine of the Middle East , Australia, Argentina, Brazil, Europe and the United States, and is also important in...

, sugar beet

Sugar beet

Sugar beet, a cultivated plant of Beta vulgaris, is a plant whose tuber contains a high concentration of sucrose. It is grown commercially for sugar production. Sugar beets and other B...

s, dates, almond

Almond

The almond , is a species of tree native to the Middle East and South Asia. Almond is also the name of the edible and widely cultivated seed of this tree...

s,

Exports and imports

Exports: $15.15 billion f.o.b. (2007 est.)

• Exports - commodities: textiles, mechanical goods, phosphates and chemicals, agricultural products, hydrocarbons
• Exports - partners: France 30.7%, Italy 20.6%, Germany 8.4%, Spain 5.4%, Libya 5.1% (2006)

Imports: $18.03 billion f.o.b. (2007 est.)

• Imports - commodities: machinery and equipment, hydrocarbons, chemicals, fuel, food
• Imports - partners: France 24.1%, Italy 22.2%, Germany 9.8%, Spain 5.1% (2006)

Debt - external: $19.27 billion (December 2007)

Economic aid - recipient: $376.5 million (2003)

Currency

Currency: 1 Tunisian dinar

Tunisian dinar

The dinar is the currency of Tunisia. It is subdivided into 1000 milim or millimes . The abbreviation DT is often used in Tunisia, although writing "dinar" after the amount is also acceptable ; the abbreviation TD is also mentioned in a few places, but is less frequently used, given the common use...

(TD) = 1,000 millimes

Exchange rates: Tunisian dinars (TD) per US$1 - 1.2776 (2007), 1.331 (2006), 1.2974 (2005), 1.2455 (2004), 1.2885 (2003)

Fiscal year: calendar year

External links

• Historic Growth Trend of Tunisia’s Economy, 1962 – 2007