Tunisia’s slow economic growth fails to generate employment opportunities

The 2020 World Economic Forum ranked Tunisia 78th out of 180 countries on the unemployment index.
Sunday 02/02/2020
Idle. Tunisian youths play on their mobile phones in the central Tunisian town of Sidi Bouzid.        (AFP)
Idle. Tunisian youths play on their mobile phones in the central Tunisian town of Sidi Bouzid. (AFP)

TUNIS - Data from Tunisia’s National Institute of Statistics indicate that tackling the unemployment crisis in Tunisia has eluded authorities for nine years because of the slow implementation of mechanisms to revitalise the labour market and lack of action in that regard.

That the unemployment rate remained at the same level over the past nine years proves that labour market reforms have not mitigated the effects of austerity measures and cuts in public spending, subsidies, wages, fees and taxes imposed to address financial imbalances.

Tunisian authorities tried to break away from the weight of the old labour system, which was based on unqualified work forces. This factor, along with continuous political tensions, led to increased unemployment rates.

That is why international financial institutions, including the World Bank, stepped up pressure on Tunisia to accelerate control of unemployment rates and increasing growth in Tunisia’s weakened economy.

Despite various support programmes for the labour market by successive governments, many Tunisians said their conditions have worsened because of the rising unemployment rate, which has reached 15.3%. The unemployment rate was 11% in 2010.

Official statistics confirm that the unemployment gap widened in rural areas compared to cities and that the segment hit the hardest by unemployment is university graduates.

Popular and economic circles alike are trying to learn the causes that have prevented authorities from achieving even the slightest breakthrough in this sensitive file.

Specialists said there are structural factors keeping unemployment figures at their current levels. Such conditions will be difficult to address in the absence of a clear and structured vision guiding economic recovery.

Successive governments since 2011 have established campaigns to promote formal mechanisms for creating job opportunities, such as financing government projects in marginalised areas or encouraging young people to start their own businesses but those steps are progressing very slowly and have produced little.

The World Bank said the unemployment problem in Tunisia cannot be limited to figuring out the number of job opportunities that are supposed to be created each year. This is so because employment is closely linked to economic growth. World Bank Country Manager for Tunisia Tony Verheijen said Tunisia was required to achieve an annual growth rate of 5-6% to provide employment opportunities.

Current growth figures, however, indicate that the Tunisian economy is finding it difficult to reach the 2% growth figure, which explains authorities’ confusion in addressing the country’s chronic economic crises and especially unemployment.

Tunisian authorities have, in recent years, adopted various measures and initiatives to incentivise the private sector to employ more university graduates, given that the public sector was saturated. The measures, however, failed to achieve their goals.

Some previous measures can be cited for exacerbating the problem, such as the wave of indiscriminate recruitments in the public sector during the era of the Troika government in the three years following the January 2011 revolution. Those measures inflated public budgets tremendously and the government adopted a plan to lay off employees and provide them with financial incentives to create their own business projects.

There are approximately 700,000 public sector employees. How long is the state capable of bearing the wages of such a large number of employees?

Statistics show that 52% of Tunisians work in the services sector, about 18% in the manufacturing, 15% in non-manufacturing industries and 14% in the agriculture and fishing sector

The 2020 World Economic Forum ranked Tunisia 78th out of 180 countries on the unemployment index. That means it is very far from achieving its ambitions.