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Tunisia: Tunisia weathering external shocks

Thanks to its diversified and open economy, Tunisia has contained fallout of the global economic crisis and confirmed, one more time, its ability to resist external shocks, underlined the recent joint report of the African Development Bank (AfDB) and the Organisation for Economic Co-operation and Development (OECD) on “Economic Prospects in Africa 2010.”

The report, presented on Tuesday in Tunis, further adds that the Tunisian economy’s relatively firmness is reflected in achievement of a positive growth rate (+3.1% in 2009), the increase of agricultural and fishing yields (+6.0%), thanks to a rainy season, and also the rising production of non- manufactured extractive industries (+5.3%), including mines (+ 6.7%) and oil (+13%).

A special award has been earned by the information and communication technologies (ICTs) sector which has gone up by 16%. These results have confirmed the World Bank’s recent assessment which ranked Tunisia on top of Africa in terms of telephone density and number of computers per inhabitant, and also on top of North Africa regarding the ICTs access index.

According to the report, the global crisis was not only a challenge to be taken up but also presented new opportunities to be seized in matters of mobilization of new influx of foreign investments and off-shoring of industrialized countries’ companies.

In this regard, the report highlights the measures Tunisia adopted to contain the negative effects of the crisis on exporting companies (offshore and others).

These steps include interventions made for the banking and financial systems and others touching upon the two engines of growth, namely exports and domestic demand.

In this context, the policy adopted in 2009 focused on revitalising domestic demand, promotion of small- and medium- sized firms and support to exports.

At the budget and monetary levels, the report points out that Tunisia’s cautious policies helped it curb the impact of the global crisis on growth and employment, while ensuring macro-economic stability.

Regarding Tunisia’s position on the international scene, the report points out that the country’s openness policy on the global economy was not undermined by the impact of the global financial and economic crisis.

Thus, the authorities have decided to carry on lowering customs duties to meet the international commitments (World Trade Organisation, Agadir Agreement, Arab Maghreb Union, free-trade agreements, etc.) and stimulate external exchanges.

Regarding foreign debt, the AfDB-OECD report shows that the latter’s ratio fell between 2008 and 2009 and that the analysis of sustainability shows no sign of fragility.

It also indicates that Tunisia enjoys a rather enviable financial situation and a positive image among donors at both multilateral and bilateral levels. Debt servicing rose from 10.7% of the exports in 2008 to 14.3% in 2009. This ratio is expected to reach 12.6% and 10.3% in 2010 and 2011, respectively.

Overall, the financial sector has not undergone any direct effects of the global crisis, according to the same report, owing to a very limited securitisation system, financial loans granted at fixed interest rates that take into account the borrowers’ reimbursement capacity and represent only 10% of the bank’s commitments and a foreign participation in the Tunis stock market that is limited to 25% of financial capitalisation.

On the State’s own resources, the report points out that reforms of the tax system and rationalisation of public spending helped improve the indicators of public funds and combat tax evasion.

Still regarding taxation, the report reminds that Tunisia is among the best ranked ten countries in the Middle East and North Africa region, according to the 2010 Doing Business Report.

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