ECONOMY - Rewards of industry
Survey written by Anver Versi
Tunisia’s relentless march towards a first world economic status shows no signs of abating. If anything, the pace is quickening. GDP growth this year is expected to hit the 6% mark. Following an average growth rate of around 5% for the last decade, this is a remarkable performance, especially for a country with few natural resources.
Like Mauritius, the other star in Africa’s economic firmament, Tunisia is reaping the rewards of its heavy investment in human resources. Like Mauritius, it is using the skills of its people to make things for which there is a high international demand. Unlike Mauritius however, Tunisia is situated right in the heart of its principal market – the European Union – to which it sends around 80% of its exports. Goods from Mauritius, on the other hand, which is located far out in the middle of the Indian Ocean, have to make the long haul to Europe and then push out even further to reach the United States.
It is this proximity to Europe which is the key to Tunisia’s economic thrust. But proximity on its own means nothing – as witness Tunisia’s neighbours in the Maghreb. It is making this proximity count that has transformed this North African country of nine million into a regional power house.
Pragmatic, thoroughly thought out policies, and the energy and determination to carry them through, lie at the heart of Tunisia’s success. Under the leadership of President Zine El Abidine Ben Ali, every factor that could have slowed down or impeded the country’s development was thrown into the rubbish bin; everything that enhanced development was nurtured and encouraged.
The result has been remarkable political stability in a volatile region, the highest per capita income and the best literacy rate in Africa, easily the most qualified workforce on the continent and a superb, modern infrastructure.
Given such a fertile soil, it is hardly surprising that some 2,000 international companies have taken root in Tunisia. This year alone, the country expects to attract another $600m worth of foreign direct investment. This industrial muscle, added to the thousands of world-class Tunisian enterprises, equals an African Singapore in the making.
Tunisia’s immediate goal is to be fully prepared for the 2008 free trade zone agreement with the EU. This entails two separate revolutions which in the end have to dovetail perfectly. The first is to upgrade, modernise and increase physical infrastructure and the second, perhaps more important, is to raise human performance levels.
Hive of activity
Both strands of the strategy are well under way. Tunisia today is a hive of furious activity. At least 45 major construction projects, with a value of around $4.6bn, are either well advanced or nearing completion. Avenue Mohamed V in Tunis, an elegant avenue with old-world charm, is being transformed into a modern commercial artery with glittering high-rise office blocks. The massive new Ministry of Foreign Affairs building is set to be a landmark. A new, ultra-modern all-purpose stadium is taking shape at Rad¸s and will be completed in time for the 14th Mediterranean Games in 2001. A large new marina is also approaching completion at the tourist resort of Hammamet. Scores of other projects, including flats, office buildings, factory shells, shopping malls, hotels and leisure facilities such as golf courses are under construction up and down the country. As you travel around Tunisia, the phrase ‘building the future’ takes on literal meaning.
The country is preparing itself for the larger volume and faster pace of economic activity that the EU agreement will entail. The Tunis-Carthage International airport has already been expanded and road and rail networks are increasing steadily. Berthing space and port facilities are undergoing continuous upgrading. Today, there are 166 weekly flights to Europe and 20 sea-going departures. Traffic by land, sea and air will increase year by year until 2008 but the country’s transport authorities are confident they will have the capacity to deal with whatever volumes come their way.
The benchmark for a country’s economic development is the state of its telecommunications. There is not much point in building massive infrastructure if people cannot communicate easily, cheaply and effectively. All business, at the end of the day, is the result of person to person communication. Tunisians, who have known the value of effective communication for thousands of years, need no second bidding.
The government has announced that the number of telephone lines will double to two million by 2004 and total investment in the sector is expected to be around £300m this year. The network is fully digitalised. But this is only the tip of the information technology revolution. The number of Internet subscribers has leap-frogged from 39,000 last year to over 100,000 this year. Mobile telephony is also expected to show a sharp rise when a second GSM (global system for mobile communication) operator is identified later this year. By 2003, Tunisia will allow foreign telephone service providers to enter the market. The net result of these developments is that the cost of making telephone calls is coming down while the number of people with access to telecommunications facilities is expanding at an astonishing rate.
Tunisia is one of the few developing countries to place such a high priority on the state of the environment and land development. Clear-sighted policies and a vigorous application of regulations have resulted in Tunisia enjoying the status of the cleanest country in the southern Mediterranean. Apart from the positive impact this has on health and tourism, it could become a crucial competitive element when international environmental regulations begin to bite in the near future. The current international manufacturing giants, China, Taiwan and Hong Kong are way behind in environmental management. Unless they can get their environmental act together, they could easily find themselves losing large chunks of their present very lucrative markets. Investment will then be forced to look for environmentally friendly manufacturing bases. Tunisia has thus neatly placed itself in the front row of such bases.
The human factor
So much for preparing the ground for the great economic leap forward. What about the human factor? Is the average Tunisian willing and able to live in the fast lane? The answer, according to the World Bank, is a qualified yes. Tunisia’s inve