Discussion Paper

Industrial policy in Tunisia

Erdle, Steffen
Discussion Paper (1/2011)

Bonn: German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE)

ISBN: 978-3-88985-529-9
Price: 6 €

Tunisia's industrial policy is generally perceived as ‘best practice’ in its regional context. A semi-closed statist economy has increasingly been turned into an outward-oriented market economy which has consistently produced growth rates well above the regional average. This has mainly been due to consistent government investment in public infrastructure and particularly in the education sector, a comprehensive, incremental approach to socio-economic reforms, and a professional civil service able to ‘deliver’ and harness foreign financial inflows for development-oriented purposes. But the Tunisian ‘miracle’ is still rather fragile, and recent events have proven this. The main fault-lines are a high degree of vertical fragmentation, a strong dependency on a few foreign markets, a strong focus on simple assembly activities, and a correspondingly limited capacity to create qualified employment. A major obstacle for the regime's declared goal to achieve a qualitative breakthrough toward a fully developed economy and enhance upward mobility for the broad public has also been the fact that the country's political and economic elites are intertwined in numerous, intricate ways, and that there are thus few incentives for private businessmen to make the necessary long-term investments in knowledge-intensive sectors.