Economic and Social Equality Go Hand-in-Hand in Tunisia’s Goods and Services-Oriented Economy

By Janet McMahon

It may take the first-time visitor to Tunisia’s capital a few days to notice what the city lacks—a multitude of Mercedes, for one thing. For another, the presence of homeless people so common now to American cities. When one begins to look more closely at the character of Tunis one senses a pervasive egalitarianism among its citizens that extends to their possessions and, even more importantly, to their relationships and transactions as well.

Asked to explain this apparent lack of extremes of wealth and poverty, Mohammad Ghannouchi, Tunisia’s minister of international cooperation and foreign investment, cites his country’s belief that “economic progress should go hand-in-hand with social progress.” The state, he elaborates, “has a double responsibility—to create a favorable environment for development of business, through deregulation, etc., while ensuring the distribution of benefits to the maximum number of its citizens.”

The minister describes the results of this policy as “so far, so good.” Some 60 percent of Tunisians are middle class. Poverty afflicts about 6 percent of Tunisians, who receive government assistance and whose number is declining.

Nor are Tunisia’s citizens the only members of society exercising restraint. Noting the modesty of the building which houses his ministry, Ghannouchi stressed the importance of the government mobilizing and utilizing resources intelligently. “Our resources are limited,” he explained, “and the state must set the example of how to use them.”

With an eye to achieving reform without sacrificing stability, the government of Tunisian President Zine El Abidine Ben Ali imposes yearly price increases on consumer products. “The population trusts that the policy is in their interests,” Minister Ghannouchi said, “because they see daily results—in increased purchasing power and improved transportation and education.”

Tunisia’s dealings with international lending institutions reflect its priorities as well. Its first World Bank-funded project, in 1960, was for education—as was its 100th project two years ago. The now 120 Tunisian projects funded by the World Bank have been “the result of dialogue and in the context of our priorities,” Ghannouchi noted, and have addressed such needs as education, forestation, water movement and environmental protection.

The International Monetary Fund sends a yearly delegation to prepare a report on Tunisia’s economy. Since the country achieved independence in 1956, however, Tunisia has never had to reschedule its debt and IMF intervention has not been necessary. Nor is this solely out of concern for its current citizens. Noting that Tunisia has succeeded in maintaining its debt service at less than 17 percent of its gross national product, Minister Ghannouchi maintains that “the debt must remain tolerable in order to ensure its equitable redistribution among generations.”

Since 1990, the minister stated, “Tunisia has called on the North to rethink cooperation and move on from the logic of aid and assistance to one of partnership and mutual interests.” The establishment of mutually beneficial and profitable relations, he believes, would not only benefit Tunisia but would create the conditions for peace, since stability and cooperation are linked.

Toward this end, Tunisia has become one of the first countries to sign a cooperation agreement with the European Union. While he notes that it “triggers certain problems because of the different levels of development,” Ghannouchi describes the agreement as “a positive development” and a “stimulant to modernize, reform and improve the environment.”

With limited raw materials (constituting less than 10 percent of the country’s exports), the Tunisian economy is based on goods and services, with manufactured products accounting for more than 60 percent of its exports. It currently is the fourth largest provider of textile products to Europe, and also exports fertilizers. These clearly will be subject to increased competition under the new agreement.

Tunisia’s main source of foreign exchange, however, is tourism. The country’s beaches are a major destination for European tourists, and it is hard to imagine that they won’t remain so.

Nevertheless, the EU agreement is neither perfect nor finalized. Some Tunisians complain that while they still require visas to enter Europe, Europeans now can enter and leave Tunisia without one.

Also, precise stipulations for free-trade areas are yet to be determined, and negotiations on the status of important sectors such as agriculture and services are scheduled over the next few years. However, “many measures in favor of enterprise have been instituted since the signing of the agreement to reinforce competitiveness and help enterprises integrate into the world economy,” the minister noted.

Although the U.S. has had no bilateral foreign aid programs in Tunisia “for some years,” Minister Ghannouchi described the U.S. as a “friend of Tunisia which supported us firmly immediately after independence and for years.” He welcomed the recent Eisenstadt initiative for economic partnership with the Maghreb countries, describing it as a “bilateral, original approach to reinforce investment and commercial exchanges.”

Since one of Tunisia’s top priorities is “to consolidate relations with all countries,” Ghannouchi welcomed the possibility of a “concrete, credible, clear agreement which would help create conditions leading to the consolidation of human and social exchanges, the establishment of a legal framework to enable freer access of Tunisian products to the U.S. market, and the mobilization of resources to enable the U.S. private sector to invest in Tunisia.”

Looking toward the future, Minister Ghannouchi cited the creation of enough jobs for Tunisia’s youth as the country’s main challenge. “Our young people are more demanding,” he observed, “but we are more confident and at ease, as we are well positioned to be able to meet the future needs of our country. We are a small country, it’s true, but it’s an old civilization, with 3,000 years behind us, and consequently we are deeply rooted.

“And even small countries can overcome bottlenecks. We must be prepared at both the human and technical levels.”

Recalling the traffic on the streets of Tunis, Minister Ghannouchi likened the government to “a good—not a grand—car with good lights and an experienced driver able to reach his goals.” With many such steady hands on the wheel, steering toward the same destination, it’s easy to agree with the minister that Tunisia can look forward to “a creative, stimulating 21st century.”