Tunisia

Tunisia is a small, upper middle income country located on the southern coast of the Mediterranean in North Africa.  It has a population of 10.5 million, and a land area of 155,360 km sq., and is bordered to the east by Libya and to the west by Algeria.  Tunisia’s population is young, with 23% of the population under the age of 15 and an estimated 55% under the age of 24. The population is highly urbanized, with 66% residing in cities and the majority concentrated in the northern districts of the country, along the Mediterranean coast and in the capital city of Tunis. The arid interior of the country to the south and west is less populated due to the desert climate and scarcity of water resources.

The World Bank Group is playing an increasingly important role in Tunisia during the post-revolution period providing the government with budget support loans to help with the implementation of various reforms in the areas of transparency, social services, foreign investment and regional development.

BIC has been working with Tunisian civil society since 2011 to monitor the World Bank’s operations in the country and engage with it around different critical issues. These interactions have led to some early successes in ensuring early access to country strategy documents, facilitating engagement between Tunisian civil society and Bank officials and strengthening local knowledge about the Bank’s activities in the country.

In the aftermath of the revolution, many issues previously not highlighted by the Bank and other international institutions have been brought to new light and importance in the development agenda such as the lack of reliable data; the overwhelming absence of civil society under a repressive regime; the regional disparities in levels of wealth and employment; the lack of opportunities for the country’s educated youth; the high influence of European donors on the development agenda, and environmental issues. Together, these challenges ought to form the lens through which we consider the World Bank’s current development profile in Tunisia.

Data accuracy: One way repressive regimes are able to maintain their grip on power is by controlling the availability and accuracy of information in the country.  In Tunisia, economic data reported by the World Bank was often based on government statistics, and in the post-revolution period many of these statistics are being found to be inaccurate and unrepresentative of the actual conditions. For example, the World Bank uses the national poverty rate as a measure of poverty in Tunisia. This rate is based on data provided by the government and measures the percentage of the population below the national poverty line which differs from country to country. In 2009, according to the (Tunisian) National Institute of Statistics, 3.8% of the Tunisian population lived under the poverty line. In contrast, new post-revolution statistics released in May 2011 by the Tunisian ministry of social affairs set the actual poverty rate at 24.7% of the population. The vastly different figures could be the result of using a different measure of poverty, or blatant misinformation. Regardless, the inconsistency leads to misleading representation of the actual situation of Tunisia’s poor. In addition to data inaccuracy, there is the issue of unavailability of more recent economic and social data on Tunisia, which has even proved to be a limiting factor in the research for this study.

Regional disparities: The economic and social conditions in Tunisia’s urban areas and coastal regions are much different than those in rural areas and the interior of the country, and the extent of these disparities and the real situation of the poor is becoming much clearer as more data becomes available in the post-revolution period. The interior regions of the country, including the north-west and central-west districts, are known to face much higher rates of unemployment and poverty than the coastal areas, which profit from tourism and trade with Europe. The Ben Ali regime’s model was to place a disproportionate amount of attention and funding to the coastal regions. In 2005 – and this data could be questioned – Tunisia ranked 60^th globally in terms of inequality levels with a GINI score of 40. This was recognized as a major problem and in the transition era, it was agreed that the model would be flipped to start pouring resources into those areas that needed it most. The World Bank is also taking this course and is, for the most part, directing its development projects to the areas in most need of them. One question remains though: if there is still an inaccurate picture of regional needs, how will the Bank or government know who to direct funds to? There needs to be a proactive effort to assess the economic and social conditions of all Tunisians in order to ensure that those who need help the most are not slipping through the cracks.

Unemployment: Unemployment in Tunisia has been high for decades, and was one of the forefront issues expressed in the 2010-2011 uprisings, with statistics setting unemployment at around 19% in 2011. Unemployment disproportionately affects the poorer internal regions of the country and certain age groups particularly the youth as well as recent graduates of higher education.  According to some statistics, youth unemployment of those between the ages of 15-24 was as high as 30.7% in 2005.

European influence: Because of Tunisia’s geographical proximity to Europe, it has close economic and political ties with the region.  Most of Tunisia’s exports—primarily clothing and textiles, mechanical goods, phosphates, chemicals, and hydrocarbons —go to Europe, and Europeans account for most of Tunisia’s tourists—the country received 6.9 million European tourists in 2010. Because of these ties, Europe has a vested economic interest in Tunisia, and seeks to influence its development through a variety of means including through its multilateral financial institutions like the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD).  While the World Bank has a mandate to reduce poverty through its development projects and programs, the same is not true for the European banks: EIB explicitly finances investment projects that further the interests of Europe and EBRD’s mandate is to support private sector investments in central Europe and central Asia as well as the transitioning of those countries into more open markets. EBRD recently expanded its mandate to include four countries in the Middle East North Africa region including Tunisia. So while these institutions play a big role in Tunisia, they often wield great power to influence projects and policies that benefit their European shareholders’ countries rather than the development of Tunisia.

Developing civil society:  Under the repressive Ben Ali regime, an active civil society was practically non-existent, and the few organizations that did exist operated within a very limited space and their activities were highly restricted. As the Tunisian revolution brought about more freedoms and opened the door for a more vibrant civil society, a large number of new and innovative organizations started forming. However, as  this takes place in a rapidly changing environment and in conjunction with the transition to democracy, many organizations lack the institutional capacity, resources,  networks, or focus to effectively monitor the World Bank’s important role in the transition phase and beyond.

Immigration and remittances: Remittances from Tunisia’s diaspora of about 1 million were calculated at $2 billion accounting for 4.4% of GDP in 2011 and came mainly from Europe and Libya.  Due to the European economic crisis, and the violence in Libya, many Tunisians working outside of the country have been forced to return to seek work in Tunisia, further increasing the strain on the jobs market.  In addition, many Libyans are seeking refuge in Tunisia, adding to the problems of unemployment that already exist.

Education: While most analysis shows that Tunisia has been successful in creating a universal free education system and achieving high school enrollment and literacy rates across broad segments of the population, there are issues surrounding the quality of education and how it translates to finding work.  While many Tunisians have the opportunity to receive a higher education degree, there is a significant mismatch between the requirements of the job market and skills learned in schools and universities.  In fact, the highest educated Tunisians are the most likely to be unemployed. Some studies point to the job market as not providing enough jobs for highly skilled or educated workers, while some stress the need for reform of the education system to produce graduates with different skill sets.

Environment and climate change: With its coastal regions in danger of environmental damage from rising tides, and the scarcity of water in its desert interior, Tunisia faces some unique ecological challenges. Among these are water stress, marine resources degradation, and pollution in the main industrial areas.

Toolkits

The World Bank Group and Tunisia: A country study, Bank Information Center, March 2013
International Financial Institutions and the Middle East and North Africa: A primer for NGOs, Bank Information Center, October 2007

Other Resources

World Bank Tunisia country page
International Finance Corporation Tunisia page

Muna Rehman
Middle East and North Africa Program
Email: mrehman@bicusa.org
Tel: +1 (202) 624 0625