economic and social development in tunisia

8/6/2019 Economic and Social Development in Tunisia

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Economic and

Social Development in Tunisia

Republic of Tunisia

Toward a higher stage of growth

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Republic of Tunisia

Economic and

Social Development in Tunisia

Toward a higher stage

of growth

Jun 2007

2007-2011


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Introduction

Tunisia has followed a comprehensive and prospective development approach, anticipating the

rapid transformations in a world context triggered by an expanding globalization and

accompanied by a growing importance of knowledge, the control of technology, the development

of immaterial economy and the emergence of new processes and modes of production and

marketing.

This approach has placed man in the forefront of development priorities inasmuch as he is

considered to be, at the same time, the most important objective and means in the process of

creation and distribution of wealth.

This particular interest is reflected in the essential place given to the social dimension in thedevelopment approach, a dimension that constitutes indeed the keystone in the establishment

of a modern and balanced society capable of guaranteeing equal opportunity for all classes and

eliminating all forms of exclusion and marginalization.

In effect, thanks to this exhaustive view and to the concordance of the different dimensions of

development, Tunisia has managed, over the past decade and particularly during the X th Plan

period, to make convincing socioeconomic gains and to score numerous successes in the various

fields and sectors as acknowledged by international authorities and a number of rating agencies

which placed Tunisia in the advanced ranks within their annual reports on the economic

performance in all countries. The chief gains include the achievement of an annual growth rate

of 4.5% on average, an increase in the per capita income to the level of 4054 TD, a reduction in

the poverty rate to less than 4%, the creation of 372000 new jobs, and a marked improvement

of human and social development indicators as well as of living conditions.

While security and social peace fundamental features of the domestic climate were essential

in achieving the above results, the world economic situation which proved to be unfavourable

owing to the deterioration of worldwide security and its harmful effects on countries,

particularly those with emergent economies has required substantial efforts and an

intensification of reforms towards integration and openness, which has contributed, in spite ofdifficulties, to the achievement of high levels of integration and the conquest of new market

positions.

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The XIth Plan period assumes major importance in view of the need to preserve and

consolidate the accomplished gains and the obligation to meet national aspirations. These

include essentially the attainment of a higher level of growth which would make it possible

to increase income and to cope with the additional demand for jobs particularly that of

Higher education graduates. They also include the achievement of further gains in the

fields of human development and social prosperity.

To that effect, the development strategy for the next Plan (2007-2011) has been based on the

permanent features of the development action to consolidate economic competitiveness, to

strengthen social achievements and to develop such human and material capacities as would

facilitate the integration into, and access to, the opportunities it provides.

In this regard, the adopted development strategy assumes the implementation of a substantial

volume of investments amounting to 49 billion dollars of which two-thirds are assignable to the

private sector. It should be noted that private investments will be geared principally towards

promising activities with a high knowledge content and the implementation of a number of

major projects such as the Enfidha Airport and deep-water port an the Sekhira refining unit as

well as some infrastructure projects in the fields of telecommunications, computer science and

new technologies.


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CONTENTS

Accomplishments over the 2002-2006 period

1. Reforms and development programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

2. Quantitative results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

The 2007-2011 Development Plan

1. Main objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

2. Development scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

3. Development policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Boosting employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Investment promotion and acceleration of new business creation . . . . . . . . . . . . . . . . . . .19

Export promotion and strengthening

of integration into the world economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Preservation of balances and development of financial policies . . . . . . . . . . . . . . . . . . . . . . .21

Human resource valorisation and consolidation of social progress . . . . . . . . . . . . . . . . . . .21

4. Financing requirements for the XIth Plan period (2007-2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

Appendix: Economic and social indicators

1. Main demographic and social indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

2. GDP growth by sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

3. Savings, consumption and investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

4. External payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

5. Public finances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

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Accomplishmentsof the Xth Plan

2002-2006

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1. Reforms and development programs

The development action during the 2002-2006 five-year period was marked by an intensification

of efforts to carry out national policy guidelines and to reach the agreed targets within a

relatively unfavourable economic situation at international and regional levels. The period was

characterized by a surge of reforms and policies aimed at providing the necessary conditions forfurther improving the performance of the national economy, developing its structure and

enhancing its competitiveness, meeting the requirements of openness to the international

environment and ensuring its adaptation to world transformations.

In this way, the implementation of development programs and perseverance in the reform effort

made it possible to reach economic and social objectives thus reflecting the good performance

of the economy and the effectiveness of the strategies and programs involved, to contribute to

the reinforcement of gains accomplished over the previous stages and to consolidate the rapid

expansion of Tunisia on the international scene.

The support given by the program to upgrade industrial service companies, the adoption of

specific programs to restructure hotel units, the improved performance of the agricultural sector,

the application of national strategies to promote human resources, the facilitated access to new

technologies, the streamlining of productive systems, the attention paid to distribution

networks, quality improvement and the modernization of road infrastructures and

communications as well as the establishment and development of industrial and tourist zones,

contributed positively to enhancement of the economys competitiveness and facilitation of its

integration into the world economy.

In this regard, the increased interest in private investment during the same period was carried

out through intensified efforts to provide support for entrepreneurs, improved services by

support structures, simplified procedures for the creation of new businesses, cancellation of

authorizations and institution of a network of business incubators and business centers. Private

investment took advantage of new prospects which were generated by major steps taken to

promote and establish regional structures in charge of business creation and promotion of

innovative projects, the setting up of one-stop-shop for investment and the creation of

technological parks in addition to the enrichment of financing instruments through the

establishment of the Bank for Financing Small-and-Medium-Sized Enterprises, the revised

FOPRODI (Fund for Industrial Promotion and Decentralization), and the doubling of the SICAR

capital (venture capital investment company).


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Those reforms concerned the development of the tax system, the modernization of monetary

policy through the implementation of open-market instruments, the optimization of liquidity

control operations and the adoption of a flexible exchange policy along with the reinforcement

of financial liberalization and in such a way as to facilitate the transactions of national

companies abroad and to drain more foreign investment. The reforms also aimed to improvethe performance of the financial sector and the quality of the services provided. In effect, they

concerned the reinforcement of technical and financial capabilities, the restructuring of the

banking sector,the consolidation of the financial market by modernizing the institutional and

legal framework, reinforcing the insurance sector and improving its services.

At the social level, the established specificity of the national development approach based on

the comprehensiveness and interdependence of economic and social dimensions and on the

consolidation of institutional capacities, was reflected through various programs, mechanisms

and measures aimed at improving the living conditions of the different social categories and all

regions while paying special attention to individuals with specific needs.

The reforms carried out in the field of education, vocational training and Higher education

covered mainly the modernization of teaching methods, the improvement of quality indicators

and the effectiveness and consolidation of the new information and communication technologies

as well as greater openness of those sectors to their environment. At the same time, the legal

framework governing vocational training and Higher education was revised to take into

account the new requirements of the development process.

2. Quantitative results

The previous five-year period was also characterized by an improvement of health and social

security coverage and related services, the consolidation of public utilities and a diversification of

the programs intended for vulnerable classes. The purpose was to reduce poverty, exclusion and

marginalization and to further improve the quality of life in the regions.

The 2002-2006 Development Plan made it possible to achieve outstanding economic results and

to consolidate social gains in spite of the pressures linked to the international and regional

situation, particularly the excessive prices of commodities - especially oil and the political instabilityin the Arab region. Those results contributed to strengthening the position of Tunisia vis--vis its

partners and international institutions.


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In the economic field, the results obtained over the previous period include mainly the following:

A GDP increase at the average rate of 4.5%,which is a considerable pace given the difficulties

encountered by certain sectors in relation to the unfavourable economic situation at both

international and regional levels and to the negative impact of the climatic conditions on theoutput of the agricultural sector. The GDP growth was due, in particular, to the sustained

development of the service sector which showed an average growth rate of 7.2% as well as

to the performance of a number of promising industrial activities such as the mechanical and

electrical industries which progressed at an average rate of 8.9%. In addition, the contribution

of the overall productivity of factors improved so much as to be at the origin of approximately

41% of the GDP growth thanks to the reforms carried out to consolidate the organizational,

productive and commercial capacities of the enterprise.

The competitiveness of the economy and the development of its structures through an increased

share of the sectors with high technological content, estimated at 20.4% in 2006 versus 16.8%

in 2001, and a consolidated share of marketable services, which accounted for 45% of the

GDP in 2006 versus 40.5% in 2001.

The overall investment amount increased at an average rate of 5.1% to reach 41.2 billion

dinars. This level of investment reflects, especially in the social and basic infrastructure fields,

on the one hand the fruitful cooperation with Tunisia's partners and financial donors and, on

the other hand, the improved share of private investment in accordance with the established

policy guidelines regarding the sharing of roles between the public and private sectors, which

opens new prospects for the latter to contribute more to the fulfilment of development objectives.

The raising of a substantial amount of foreign direct investment which exceeded all expectations,

that is 5.5 billion dinars not taking into account the opening of Tunisie-Tlcom capital. The

previous period witnessed the establishment of 884 new companies with foreign participation

in addition to new investments made by foreign companies already established and having

elected to expand their activities in Tunisia. As for the amount mobilized by the capital

transfer of public shareholding in the capital of Tunisie-Tlcom, it amonuts approximately

to 3 billion dinars.

The firm establishment of the private sector's role in the development process as evidenced by

the consolidation of its contribution which amounted to 72% of the GDP, 57.1% of

investment, 85% of exports and 91% of job creation.

The appreciable development of exports of goods and services which increased at the average

rate of 8.5%. This performance was due to the emergence of new export sectors such as themechanical and electrical industries, the automotive components and a number of promising

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service activities. The efforts carried out made it possible to maintain the positive pace of

exports of certain strategic sectors, particularly textiles and tourism, in spite of the difficulties

of the international economic situation.

The preservation of internal and external financial stability, particularly the limitation of the

current deficit to the rate of 2.4% of GDP in 2006, the reduction in the rate of external debt

to 47.9% of the net income, the consolidation of monetary reserves, the control of budgetdeficit excluding donations and privatization to an average rate of 3.1% of the GDP.

In the social field, the results of the Development Plan over the period 2002-2006 bring out the

following facts;

The creation of 372000 new jobs covering 92.7% of the additional demand and allowing for

a reduction in the unemployment rate to 14.3% in 2006 versus 15.1% in 2001.

The improvement of the per capita income which amounted to $7000 in 2006 in terms of

purchasing power parity and the consolidation of the adjustment ratio at 30% in 2006 against

23% in 1996.

The improvement of population and health indicators particularly the rise in life expectancy to

73.6 years in 2006 versus 72.9 years in 2001, the increase in medical coverage to 1 doctor for

1000 inhabitants versus 1245 inhabitants in 2001 and the decline of infant mortality to 20.3

per thousand versus 22.8 per thousand during the same period.

The positive development of education indicators such as the percentage of children in the

6-11 age group in full-time education which rose to 97.4% in 2006 versus 94.56% in 2001,

the percentage of students enrolled in Higher education which increased from 23.2 % to

34.3% during the same period, and the improvement of the internal efficiency of the

education system particularly in terms of the fight against school failure especially at the

basic education level.

The enlargement of the social security cover which included 90.4% of individuals targeted by

the legal framework of social security in 2006 as compared to 84.2% in 2001.

The improvement of living conditions in rural areas with an increased electrification rate from

81.7% in 2001 to 98.7% in 2006 and the development of the rate of potable water supply

from 81.7% to 91.6% over the same period.

The success of development policies and the significant economic and social performance

recorded over the past five-years contributed favourably to the emergence of Tunisia's image,

the achievement of a honourable rating granted by specialized agencies which consideredTunisia, on the basis of rigorous criteria, as one of the least risky countries. Indeed, Tunisia managed

to obtain a privileged rank in terms of economic competitiveness as confirmed by the latest report

of the Davos International Forum 2006-2007.


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In addition, Tunisia was ranked 30th on the world scale in terms of overall competitiveness among

125 countries including industrial and emergent countries, thus occupying the first place in

Africa and the Arab region. It was also ranked 26 th at the international level in terms of

business competitiveness.

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The Development Planfor the period

2007-2011

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Tunisia tackles a new and crucial stage in its development process, strong with its

accomplishments and positive results boarding different fields, which consolidates its privileged

position among the leading group of emerging countries.

Confident in its capacity to meet challenges, Tunisia aspires to forge ahead with its march

towards better prospects principally by further improving the living conditions of its entirepopulation and ensuring continued progress, which would enable it to converge toward the level

of developed nations within a reasonable period of time.

On this basis, the development objectives set for the next period have been worked out with due

consideration given to national priorities, relevant policies and programs and various challenges

to be met.

1. Main objectives

In view of the profound transformations which will characterize the international arena during

the next period and taking into account national expectations and choices, the development

strategy for the upcoming period targets principally the following:

Accelerated growth to raise the per capita income and reduce unemployment.

Pursuance of a policy of income distribution aimed at improving the rate of human development,

strengthening the place of the middle class and reducing poverty.

In order to reach the main targets, it is necessary to step up ongoing efforts and gear them :

to strengthen integration into the world economy by opting for export promotion and FDI;

to promote promising labour-intensive sectors;

to optimize resource allocation;

to preserve internal and external financial stability;

to guarantee social peace and a better income distribution policy.


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2. Development scheme

Accelerating economic growth, ensuring its sustainability and increasing its employment content

as well as preserving financial stability constitute the fundamental pillars of the development

scheme for the upcoming period.

Accordingly, the projections made count principally on the following:

a rise in GDP growth at the average rate of 6.1%, which will allow the per capita income to

increase to 5763 dinars in 2011 as compared to 4064 dinars in 2006. This target is based on

the contribution of productive sectors while favouring structural changes of the economic

fabric through an increased share of marketable services in the GDP, which will rise from

47.1% in 2006 to 52.3% in 2011. It will depend on the performance of the ICT sector which

will increase at an average rate of 17.5% and on consolidating the weight of promising

high-value-added activities, which will account for 27.5% of the GDP in 2011 as against

20.4% in 2006.

At the same time, sectoral outputs are expected to improve thanks to the efforts of restructuring

and upgrading focused primarily on the adoption of new techniques. The growth of the agricultural

sector will increase at an average annual rate of 3.5%; the growth rates of the industrial and tourist

sectors will be respectively of 4.9% and 6.1%.

In addition, the targeted growth rate assumes a continued improvement of the TPF the

contribution of which is expected to reach 48% of GDP as compared to 41% registered

during the Xth Plan period.

An intensification of the investment effort through an increase in the investment rate from

22.2% of GDP in 2006 to 25% by the end of the XIth Plan. The contribution of private investment

will be raised from 12.5% of GDP and 56.5% of overall investments in 2006 respectively to 16%

and 63.5% in 2011. This target takes into account the improvement of FDI which will account

for 3.3% of GDP in 2011.

It is important to note that private investment will be geared more towards promising activities

with high knowledge content, not only at the level of traditional sectors such as agriculture and

tourism but also at the level of manufacturing industries or the targeted new service activities

particularly the ICT, the financial and logistical services and those rendered to enterprises. The

XIth Plan period will also witness the implementation of a number of major projects which will

contribute to improving sectoral productivity, and promoting Tunis as an international business hub.

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The creation of 412000 new jobs to cover 93.6% of additional demand thus reducing the

unemployment rate from 14.3% in 2006 to 13.4% in 2011 in spite of the pressures exerted

on the employment market due particularly to an increase in the additional demand relating

to Tunisia's demographic transition and to a change in the structural composition of job-

seekers characterized by rising numbers of Higher education graduates and an increased share

of working females. The promotion of exports which will increase at an average rate of 6.6% at current prices in

spite of exacerbated competition on the world markets. The contribution of exports to

economic growth will thus increase to 37.3% during the XIth Plan versus 22.2% during the

Xth Plan. Such a pace requires a diversification of exports and markets mainly through a greater

contribution of high-value-added activities, particularly those branching out of the sectors of

agriculture and food-processing, mechanical and electrical industries and services. Also

expected is a diversification of targeted markets within the European Union, Tunisia's chief

commercial partner, through the reinforcement of our positioning and an increase in our share

of this market from 0.7% in 2006 to 1% in 2011 and also through access to other markets

outside the European Union.

The preservation of financial stability through optimized allocation of available resources. The

current deficit will amount to 2.6% of GDP, thus encouraging the control of external debt at

the rate of 39.1% of the available income by the end of the XIth Plan versus 47.9% in 2006.

It is also planned that public finance balances will be preserved through the limitation of

budget deficit around an average rate of 2.5% of GDP apart from privatization and donations.

The targeted rate of inflation will not exceed the average of 2.8% thanks, in particular, to a

strict monetary policy.

The reinforcement of human development to guarantee equal opportunities, consolidate the

middle class, reduce poverty and implant the culture of solidarity.

Within this framework, the development strategy will be focused on the priority of active and

sustainable treatment of vulnerable classes, the optimization of the income policy, the

consolidation of health and social security coverage and the advancement of women, youth,

children and old persons. This policy is thus aimed at establishing the principle of

comprehensiveness of development and the effective contribution of all the living forces to the

attainment of development objectives, while at the same time ensuring a fair distribution of the

fruits of growth.


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3. Development policies

The realization of the objectives of the XIth Plan covering the 2007-2011 period requires the

deepening of reforms across the board and an acceleration of their pace to improve the

functioning of the economy and better prepare it for full integration into the world economy.

Accordingly, the adopted development strategy encompasses the objectives of acceleration ofgrowth and employment, support of investment, acceleration of new business creation, export

promotion, and preservation of major economic balances. The development targets also include

investment in the human capital to improve human development indicators, the consolidation

of the middle-class, the reduction of unemployment, the eradication of absolute poverty and the

improvement of living conditions in general.

Boosting employment

Employment remains the absolute priority of the nation inasmuch as it represents the mostsignificant challenge to be met considering the increasing numbers of additional job-seekers and

the change in their structure towards an increase in the share of Higher education graduates.

The various reforms implemented in this field aim, in particular, to speed up the process of job-

creation and control unemployment through the acceleration of the rate of growth, improved

performance of the employment policy mechanisms and programs , encouragement of self-

employment and private initiative, in addition to complementarity between the systems of

education, vocational training and Higher education, on the one hand, and on the other, the job

market, over and above the strengthening of regional contribution to job-creation and an

improved monitoring of the job market.

Investment promotion and acceleration of new business creation

The forthcoming period will witness a deepening of reforms inherent to the development of the

business environment, and an improved visibility for investors through further streamlining of

relevant regulations, adaptation to international standards, simplification of investment

procedures, reinforcement of capacities of the banking sector and strengthening of its

intervention in project financing throughout the implementation phases.

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Simultaneously, the reforms will concern the adequacy of the training and research system to

market requirements, the development of a modern infrastructure, support of companies'

adherence to quality systems, limitation of scattering of companies, encouragement of

groupings and support for small- and medium-sized enterprises.

In this regard, the intensification of efforts to accelerate the creation of new businessesconstitutes the main priority of the upcoming period. This priority requires the identification of

new investment opportunities in promising, innovative and labour-intensive sectors. It also

requires a wider dissemination of the culture of private initiative among youth, particularly

Higher education and vocational training graduates; the institution of a national and regional

network to support investors and project promoters in addition, to the set up of the last group

of business centers and an accelerated implementation of the national spin-off program.

The enhancement of the pace of investment during the next period will require the proper use

of the various mechanisms of investment promotion, continued efforts to set up technological

parks and to attract foreign direct investments, development partnership in high-value-added

activities, preservation of foreign companies operating in Tunisia and development of FDI

attraction mechanisms to.

Export promotion and strengtheningof integration into the world economy

Export promotion constitutes an effective means to advance towards full integration into the

world economy. Accordingly, the upcoming period will witness continued facilitation of foreign

trade procedures, the development of export support services, the promotion of electronic

commerce through development of corporate capacities in the field of command of immaterial

economy mechanisms.

Simultaneously and in order to increase the pace exports to higher levels, export diversification

will be continued to augment the share of promising sectors in which Tunisia has comparative

advantages, in addition to the diversification and conquest of new markets and the

consolidation of Tunisia's share in traditional markets.

Moreover, export promotion requires intensified efforts in support of export-oriented companies,a strengthening of support structures, the development of financing and export insurance

mechanisms, the modernization of working procedures and organizational methods within the

company, the drawing up of an exhaustive action plan to facilitate commercial establishment

abroad, improved performance of trade and diplomatic representations overseas, and action to

instil the culture of exports into the relevant actors.


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Preservation of balances and development of financial policies

Meeting future challenges, achieving development targets and emphasizing the liberal approach

require the preservation of sound financial balances. In this framework, efforts will be stepped

up to further develop the tax system in order to reduce the companies' burden and to improve

the tax output while modernizing the levying modes, reinforcing control, introducing qualitysystems in the tax administration, and improving the efficiency of public finances through

gradual institution of budget management by objectives.

Monetary and financial reforms during the forthcoming period will focus on continued

modernisation of the banking sector through reinforcement of its financial basis and

improvement of its technical capacities, development of risk analysis and control, modernization

of service quality in conformity with international standards and institution of effective

partnerships with regional and international financial institutions. On the other hand, efforts will

be continued to further develop the financial market and increase its contribution to the

financing of the economy. The reforms in this field will consist in strengthening supply and

demand, enhancing transparency and the security of financial transactions, expanding market

openness to foreign investors, encouraging companies to open up their capital to the public,

mobilizing institutional savings and developing mechanisms of collective investment in securities.

Valorisation of human resourcesand strengthening of social progress

The human capital occupies a privileged place in the development strategy of the XI th Plan and

the coming decade insofar as it is the real wealth of the country, the driving force behind

development and development's ultimate aim.

On this basis and taking into account the new development requirements and the imperatives

of openness of the economy to the outside world and of its integration into the world economy,

the need for sustained action to raise the standard of living of all population classes and to

improve the quality of life, the 2007-2011 five-year period will witness a strengthened

performance of the education, vocational training and Higher education systems with an

enhanced quality of their services, the promotion of social services and a greater interest in the

social categories with specific needs.

In addition to a decrease in academic failure, an improved rate of schooling at all levels of

education, and to the protection against illiteracy, the interventions in the fields of education,

vocational training and Higher education will be based on quality consolidation, improvement of

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teaching conditions, establishment of the information society, diversification of disciplines,

particularly in the promising high-employability sectors and enhancement of interaction of

education and training establishments with their environment and with national priorities.

These policy guidelines are confirmed by the foreseeable development of the number of students

which will rise to 478000 in 2011 and the number of vocational training graduates which willreach 65000 in the same year, as well as by future constraints on the job market.

Moreover, the next five-year period will witness further promotion of the health, culture and

sport sectors, the granting of particular care to the different population categories and treatment

of the conditions of vulnerable classes with a view to improve all the social development

indicators and provide a decent life for all social categories.

In the field of health, efforts will be stepped up to further reinforce the health care system and

improve the quality of its services, which will make it possible to increase life expectancy and

tackle chronic and non-transmittable diseases.

At the same time, social security coverage will be extended to all professional categories, besides

strengthening the support and integration programs in favour of vulnerable classes. In addition,

the different components of cultural and sport policies will be so consolidated as to bring them

closer to the citizen and enhance their contribution to the fulfilment of development objectives.

All the sectoral and specific policies and programs to be implemented during the next period aim

to raise the income level and ensure a more equitable distribution of the fruits of growth, to

maximize the weight of the middle class, to reduce the poverty rate and to improve the citizens'

standard of living with a view of consolidating human development and raising it to the level of

developed nations.


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4. Financing requirements of the 2007-2011 period

The estimates of the financing of the development plan for the next five-year period are based

on the increase in financing needs which will amount to 81939.1 MD during the XIth Plan period

versus 59726.7 MD during the Xth Plan, that is an increase of 37.2%.

Financing requirements

2002-2006 2007-2011

MD % MD %

Overall investment 41236.0 69.1 63521.0 77.5

Stock variation 1164.6 1.8 2968.4 3.6

Repayment of the debt principal

and other expenditure 11423.1 19.1 12090.7 14.8

Increase in reserves 5903.0 10.0 3359.0 4.1Total requirements 59726.7 100.0 81939.1 100.0

National savings 38348.4 64.2 59702.3 72.9

External financing 21378.3 35.8 22236.8 27.2

Total resources 59726.7 100.0 81939.1 100.0

The coverage of the above requirements will be ensured thanks to the foreseeable development

of national savings insofar as the projections are based upon an increase in the savings rate to

23.5% of the net income in 2011 versus 21.4% in 2006 and a mobilization of external financing

in the amount of 22236.8 MD versus 21378.3 MD during the 2002-2006 period.

External financing

2002-2006 2007-2011

MD % MD %

Donations 677.8 3.2 620.0 2.8

Foreign investments and participation 8455.9 39.5 8465.0 38.0

Government loans 6610.9 31.0 5650.0 25.4

Commercial and financial loans 5633.7 26.3 7501.8 33.8

Total 21378.3 100.0 22236.8 100.0

2007

-2011


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The estimates in terms of mobilization of external resources during the next Plan are based on:

he consolidation of FDI and participations which will amount to 8465 MD. This amount will

be mobilized thanks to Tunisia's credibility in the view of specialized international authorities,

the adoption of policies and measures aimed at improving the investment climate, the

diversification of the investment fields and the strengthened support for investors.

The raising of 620 MD in the form of donations to finance the structural reform programsand sectoral programs and projects from the European Union and a number of international

institutions and fraternal and friendly countries.

The mobilization of resources in the form of government loans in the amount of 5650 MD.

Given the drawings made in terms of the loans raised to finance ongoing projects and

programs, new loans are expected to be contracted in the overall amount of approximately

5400 MD.

The resort to private loans in the amount of 7502 MD in the form of commercial and financial

credits including debenture loans on the international financial markets which will be raised

jointly by the State, the companies and the authorized banks.


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AppendixMain economic

and social indicators

2007-2011

2007

-2011


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1. Main demographic and social indicators

2006 2011

Population (1000) 10 126.3 10 687

Population growth (%) 1.10 1.12

Life expectancy at birth (years) 73.6 76.5

Illiteracy rate (%) 21.9 < 10

Youth illiteracy rate (15-29 years) 5.7 1.0

Schooling rate in Higher education (20-24 years) (%) 34.3 45.5

Social security coverage (%) 90.4 97.0

Per capita income (Dinars) 4 064 5 763

2. GDP growth by sector (%)

% 2002-2006 2007-2011

Agriculture and fisheries 2.6 3.5

Manufacturing industries 2.6 4.9

Textiles, clothing and leather industries -2.2 1.5

Mechanical and electrical industries 8.9 7.5

Non-manufacturing industries 3.1 4.2

Services 7.2 8.7

Tourism 3.4 6.1

Communications 20.6 17.5

GDP 4.5 6.1

3. Savings, consumption and investment

% 2002-2006 2007-2011

Savings rate as % of income 21.7 22.7

Consumption growth 4.8 5.0

Rate of investment as % of GDP 23.4 24.1

Share of private investment as % of GFCF * 56.5 63.5

Overall investment (MD) 41 236 63 521

* Figures at the end of period


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4. External payments

% 2002 2006 2007 2011

Growth of exports of goods and services (1) 8.6 9.8

Growth of imports of goods and services (1) 7.5 9.7

Current deficit as % of GDP 2.3 2.6Foreign debt as % of net income (2) 47.9 39.1

External financing needs (MD) 21 382 22 237

Foreign direct investment and participations 8 456 8 465

Donations 681 620

Government loans 6 611 5 650

Commercial and financial loans 5 634 7 502

(1) Current prices

(2) End of period

5. Public finances (%)

% 2002 - 2006 2007 2011

Fiscal pressure 20.8 19.8

Budget deficit as % of GDP

Average of the period 3.1 2.5

End of period 2.9 2.2

2007

-2011


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MINISTRY OF DEVELOPMENT

AND INTERNATIONAL COOPERATION

Place Ali Zouaoui 1069 Tunis- TunisiaTel. : + 216 71 351 381Fax : +216 71 351 666E-mail : [email protected]

economic and social development in tunisia

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