Tunisia seeks to cut unemployment by stimulating growth

Friday 11/09/2015
Unemployment is primarily a youth phenomenon in Tunisia

TUNIS - Tunisia, whose economy has remained stagnant since the ouster of a long-time dictator in 2011, unveiled the outlines Tuesday of a five-year plan to cut unemployment by stimulating growth.

The country's key tourism sector has been badly shaken by two deadly attacks on foreign tourists by Islamist militants.

Growth only reached 1.0 percent in 2014, and the government recently said that figure would be halved this year.

Joblessness stands at nearly 30 percent, with the number even higher among young people, and one in six Tunisians lives below the poverty line.

The plan, published by the development ministry, envisages average annual GDP growth of 5.0 percent, starting off with a moderate gain next year and accelerating from 2018.

The higher growth, stimulated by better governance, diversification and regionalisation of the economy, would see unemployment dropping from 15.2 percent to 11 percent by 2020.

At the same time, the budget deficit would be trimmed.

Last week, central bank chief Chedly Ayari said Tunisia would ask the International Monetary Fund for a new aid package.

He did not spell out how much would be sought, but said it would at least equal a $1.7-billion (1.5-billion-euro) credit line granted in 2013.

That loan was to have expired in June, but the IMF extended it for another seven months to give Tunis more time to adopt needed reforms.

Visiting IMF chief Christine Lagarde said the Fund would be open to considering more aid, while insisting that Tunisia needed to press forward with reforms.

She mentioned the need for a solid banking system as well as an efficient public administration, a fair tax system and a business climate that open to competition while also providing modern social protections.