Professional Documents
Culture Documents
As in
the case of Morocco and Algeria, the origin of Islamist groups
can be traced back to domestic and international
circumstances during the 1960s and 1970s. In the following
discussion, the primary role-players will be briefly presented,
as will the similarities and differences in the conditions
contributing to these developments. In the same way as
Morocco and Algeria, Tunisia faced socio-economic
challenges while its government faced a growing legitimacy
crisis.
INTRODUCTION
Anouar Boukhars
Boukhars is a nonresident fellow in Carnegie’s Middle East Program. He is a professor of
countering violent extremism and counter-terrorism at the Africa Center for Strategic Studies,
National Defense University.
Social inequality and regional asymmetries are
deepening the chasm between Tunisia’s restless
periphery and its eastern Mediterranean coast, with the
potential to undermine the country’s democratic
transition. Tunisian coastal elites fear and
misunderstand the bitter resentment in the border
communities, making it harder to secure the country
from continuing terrorist threats. The violent extremist
groups based in these communities feed on a deep well
of disillusionment with the democratic transition and
prey on the growing sense of emasculation,
disempowerment, and helplessness among Tunisian
youth. The Tunisian government’s narrow focus on
combating extremist ideology is distracting from
addressing the real drivers of radicalization. Studies
show that the lure of violent extremist groups, such as
the self-proclaimed Islamic State, has more to do with
the promise of empowerment and restored dignity than
with ideology or religious conviction.1 Since the 2011
revolution, Tunisia has experienced an evolving array of
security threats, particularly along the country’s fragile
borders. This paper will evaluate Tunisia’s security-
based approaches to border control and provide
recommendations for addressing the dangerous divide
between the youth in Tunisia’s border regions and the
state.
UNDERPINNINGS OF RADICALIZATION
Sharan Grewal
INTRODUCTION
A HISTORY OF MARGINALIZATION
Perhaps the sharpest break with the Ben Ali era has been
the entrance of retired officers into Tunisia’s robust civil
society. Retired officers have taken an active role in
educating the public and politicians about the military
and its needs, providing the armed forces with a new
lobby to advance their interests in a democratic age.
In part, this has taken place through retired officers who
have capitalized on the newfound freedom of association
to form civil society organizations. Besides the
Association of Justice for Military Veterans, these
include the Association of Former Officers of the
National Army (formed in March 2011), the Tunisian
Center for Global Security Studies (November 2013),
and the Association of Veterans of the National Defense
Institute (July 2015).
Whether through these organizations or as individuals,
retired officers have played an important role in
advancing and shaping the public debate over the armed
forces. “The best thing we got after the revolution is the
liberty of expression,” praised retired General Said el-
Kateb. “Sometimes I write articles for [the
magazine] Leaders, sometimes I am invited to
conferences at the Temimi Foundation [for Scientific
Research and Information]. We were not permitted to
do this under the regime of Ben Ali.”68
During the drafting of Tunisia’s postrevolution
constitution, for instance, a former director general of
military security advised members of the National
Constituent Assembly on article 9, about military
conscription, and article 36, about the right to trade
unions and the right to strike, particularly the exceptions
carved out for the army and security forces. He was also
sought out by two presidential candidates in 2014 for
advice on defense policy. Likewise, former inspector
general of the armed forces Mohamed Ali el-Bekri
advised Beji Caid Essebsi during his presidential
campaign. In February 2015, retired brigadier general
Mohamed Meddeb published a book
with Leaders containing several specific proposals for
reforming the armed forces, including cutting down on
draft dodging, appointing a chief of staff of the armed
forces, and extricating the military from basic police
functions.69
Among these retired officers’ top proposals is the
development of a comprehensive defense policy to be
produced by the Ministry of Defense and then approved
by the parliament. In February 2015, the Association of
Former Officers of the National Army held a conference
putting forth this proposal, pressuring the Ministry of
Defense to then reach out to its international partners
for advice on how to draft a white paper on defense
policy. Although terrorist attacks in March, June, and
November 2015 have pushed the government back into a
reactionary mode, retired officers remained optimistic
that the Ministry of Defense would soon present a white
paper to parliament for review.
While these retired officers will have to be cautious not
to drown out civilian voices on military matters, most
observers contend that their entrance into civil society
represents a healthy phenomenon for Tunisia’s young
democracy. Given the country’s history, and in
particular the military’s minor role and Ben Ali’s
personalized rule over its affairs, there are few experts
let alone politicians who are knowledgeable about the
military or military matters. Retired officers can play a
critical role in expanding public knowledge about “the
institution of the military, the needs of this period, and
how to transform an institution that traditionally
occupied a very marginalized role in the country to the
risks and challenges for the military today,” as one
retired major colonel put it.70
Maxime Poulin, deputy head of the Tunis office of the
Geneva Center for the Democratic Control of Armed
Forces, suggests that the entrance of retired officers into
civil society “could have a positive impact. There are
shortcomings in terms of policy planning within the
government and also in civil society. These organizations
of retired officers still have trust and connections with
the Ministry of Defense, and they could eventually act as
government think tanks on security issues while officials
are caught up for the moment at managing urgent daily
matters.”71
The involvement of retired officers in civil society also
provides the institution with a new lobby to help prevent
a future president from once again sidelining the
military. Given President Beji Caid Essebsi’s links to the
Bourguiba and Ben Ali regimes, some retired officers
have expressed concerns that the progress the military
has made following the revolution may be rolled back.
Some fear a return to the old patterns of marginalizing
the military and privileging the officers from the Sahel.
Yet these officers remain optimistic that in this new era
of freedom they will at least be able to fight back. Said
retired Major Colonel Mohamed Ahmed: “If all
appointments come from the Sahel, for instance, nobody
will stay silent—we will say something about it! With the
new constitution, new parliament, and new liberty of the
press, things have changed, and we will at least
denounce a reversion to the old ways.”72
CONCLUSION
1. GENERAL INFORMATION
1.1.3. Population
Tunisia made a forceful commitment to demographic change earlier than most other
developing countries. As a result, Tunisia's fertility rate declined from a high of more
than seven children per woman in 1960 to two children currently. The country's
population growth rate has likewise dropped from 2.6 percent in the late 1970s to about
1 percent at the beginning of this century( 2008 figures). General health has improved
as well, with life expectancies climbing from less than 50 years in the 1950s and early
1960s to above 70 years today. Population growth in Tunisia is projected to be the
lowest rate among the Arab countries, due to having both the lowest fertility rate and
the oldest age pyramid. Population Projection estimate are 11.210 million by 2019 and
11.763 million by 2029.
The population of Tunisia is approximately 10.4 million inhabitants and is over 65%
urban as shown in Table 1.
Average
annual growth
rate (%)
Population density (inhabitants/km²) 31.6 39.4 50.3 59.0 61.8 63.7 0.97
Urban Population as % of total 44.5 51.5 59.6 62.6 65.2 65.8 0.63
Average
annual growth
rate (%)
GDP (millions of current US$) 1446 8486 12385 19430 29082 37077 9.7
Other
Total amount in
- 3.579 3.275 14.000 0.6 0.2
specific units*
Total amount in
Exajoule (EJ)
* Solid, Liquid: Million tons; Gas: Billion m3; Uranium: Metric tons; Hydro, Renewable: GW
Average
annual
growth rate
(%)
2000 to
1980 1990 2000 2005 2007 2007
Energy consumption**
- Other
Renewables 0.0000 0.0000 0.0001 0.0002 0.0002 +9.2
Energy production
- Other
Renewables 0.0000 0.0000 0.0001 0.0002 0.0002 +9.2
** Energy consumption = Primary energy consumption + Net import (Import - Export) of secondary energy.
*** Solid fuels include coal, lignite
Thus, the energy balance moved from a surplus situation of approximately 3 Mtoe in
the beginning of the Eighties to a slightly deficit situation starting early year 2000.
In order to address this deficit, the Tunisian authorities have engaged an energy
policy that is compatible with sustainable development. The main components are:
· Intensification and reinforcement of the efforts made for the development of the
country's hydrocarbon resources including an extension of exploration activities
(the Hydrocarbons Code). That allowed the discovery and exploitation of new
reserves allowing the compensation of the old layer's decline;
· Ensuring energy supply at lower cost in order to facilitate access to energy by the
whole population;
As a result of governmental policies during the three decades of 1980's, 90's and
00's the electricity sector has been characterized by:
§ Diversification of energy source technologies; The utilization of gas and solar
resources and the development of wind energy; reduced the share of oil fuels to
52% of the total in 2007 compared to 82% in 1980.
§ Increase of the total installed capacity that was fulfilled mainly through the
erection of new combined cycle gas turbine plants.
A short-term programme relying on some twenty presidential decisions was
announced in May 2001, which attests to the government's determination to engage
fully in favour of a rational use of energy and of the development of renewable
energies. These decisions have related to:
· Enhancing awareness raising and information;
· Setting out the appropriate legal framework to encourage the private sector to
invest in the field of energy efficiency;
· Involving the public sector in making profitable use of the energy efficiency
potential;
Despite all these efforts, Oil and natural gas are the most important source of energy
covering more than 95% of the total energy supply. Oil products are mostly utilized for
transport and industry and as heavy fuel in thermal power plants. Imported Gas comes
mainly as royalties from the 370 km long section of the TransMed gas pipeline, which
ensures the Algerian gas delivery to Italy. The quota of Tunisia will be increased from 6
to 7 billion m3/year by 2010.
To ensure a consistent and sustainable energy policy, Tunisia undertook a preliminary
strategic study on the development of renewable energies. According to this study,
which was completed in April 2004, Tunisia has a considerable potential of renewable
sources of energy especially wind. As a southern Mediterranean country, Tunisia has a
good solar potential and biomass one. It led to drawing up an Action Plan for developing
the whole range of sectors at horizon 2011, as well as setting out strategic options for
each sector for the three coming decades.
The wind energy sector, though still presenting a cost overrun with respect to
conventional power plants, seems to be today as the closest solution to economic
competitiveness for power production. Indeed the Onshore wind potential in Tunisia is
estimated, referring to preliminary studies, to 1000 MW with an average producible
energy of about 3 MWh per year and by kW installed. Tunisia’s wind power energy
objectives aim at increasing the total electricity production from 20 to 175 MW by 2010,
thus amounting to some 4,2% of the electricity production in the country. The
government plans also to install by 2011, 740 000 m2 of solar captor for domestic use.
In Tunisia, the energy consumption per capita is around 0.75 toe/capita and the
country’s total energy consumption shows a steady increase of 5%/year, as shown in
Table 5.
Aware of the importance of global environmental issues, Tunisia took part in a number of
international agreements in the fields of: Biodiversity, Climate Change, Climate Change-
Kyoto Protocol, Desertification, Endangered Species, Environmental Modification,
Hazardous Wastes, Law of the Sea, Marine Dumping, Ozone Layer Protection, Ship
Pollution, Wetlands. On the ground, the government continues to plan and implement a
number of national programs to meet the challenges of sustainable development.
Tunisia has started to open up electric power production to the private sector by virtue
of Law N° 96-27, dated April 1st 1996, which authorises the State to grant electricity
production licences to independent producers with a view to its exclusive sale to STEG.
The conditions and modes of granting the licence are stipulated in Decree n° 96-1125,
dated 20 June 1996. Tunisia has thus undertaken, first of all, to adapt the legal and
institutional framework to this option. Then it entered into force with the construction of
the IPP type plants (Independent Power Production) of Rades and of El Bibane. As a
result, an average annual growth in the total electricity generation increased by around
5 % in the period 1990-2007.
A special attention was also paid by the Tunisian Government in restructuring the
Electricity sector. Measures for improvement of metering, billing and collection of
payments for electricity and natural gas were also implemented.
Owing to a highly integrated interconnected system, the electrification index is 99.4% in
urban areas and above 95% at the national level. These improvements allowed Tunisia
to initiate both electric energy and expertise exports to other countries.
1.3.2. Structure of electric power sector
Tunisia has provided, since the early 1980s, an appropriate institutional framework for
the administration of the sector. As regards public institutions, the major actors are:
The Tunisian Electricity and Gas Company (STEG) which has monopoly
on the transport, transmission and distribution of electricity and which is,
therefore, the sole buyer of this energy. It is also the main producer;
The electricity transmission network and capacity of Tunisia are considered sufficient for
the current and forecasted loads. The high-voltage transmission network has the
interconnections with the two neighbouring countries Algeria and Libya. Tunisia and
Algeria agreed to increase the electric power interconnection capacity up to 400 KV as
from 2010, against 220 KV currently. An interconnection with Italy (Cecelia) is also
planned.
1.3.3. Main indicators
In 2009, the total STEG installed capacity of the generating stations in Tunisia is 3 050
MW. Table 8 shows the historical statistics of the electricity production, the electrical
energy balance and the annual electrical energy consumption per capita.
TABLE 5. ELECTRICITY PRODUCTION, CONSUMPTION AND CAPACITY
Average
annual growth
rate (%)
- Nuclear 0 0 0 0 0
- Geothermal 0 0 0 0 0
- Nuclear 0 0 0 0 0
- Geothermal 0 0 0 0 0
Electricity consumption per capita (GW.h/capita) 0.352 0.545 0.939 1.121 1.177
2. NUCLEAR POWER SITUATION
2.1.1. Overview
It was on November 03, 2006, that his Excellency the President of the Republic
commanded the Tunisian Company of Electricity and Gas (STEG) to conduct, in
collaboration with the Ministry of Higher Education, Scientific Research and Technology,
a techno-economic feasibility studies for NPP (Nuclear Power Plant) implementation. This
occurred in an energy context marked by the dwindling production at Tunisia's oil fields
and the surge in hydrocarbon prices that make country spending heavily on energy
imports to power its electricity network. This decision comes in favour of further research
and development of country’s nuclear option in order to reduce the reliance on oil and
gas.
Various studies for the introduction of nuclear power in the electricity supply system
were conducted since 1982. The last one was carried by CNSTN in collaboration with
STEG and SONED (National Water Distribution Utility), and with the assistance of the
French CEA, and supervision of IAEA from 2000 to 2004. The aim of this study was the
investigation of the economic feasibility of an NPP implementation for electricity
generation and water desalination. Various technologies were considered including 2 nd ,
3rd and 4th generation NPP models. The study showed that taking into account the local
condition in Tunisia, the nuclear option was competitive for the price of several energies
among which a barrel of crude oil higher than 38 $.
Also, a feasibility study for the implementation of a research reactor at CNSTN on the
site of Sidi-Thabet was carried in collaboration with FRAMATOME and CEA. The study
dealt with the implementation of a TRIGA MARK II research reactor and the associated
labs. CNSTN an STEG agreed that the implementation of a research reactor is a
cornerstone of the human resource development program to be put in place for NPP
project.
A Task Force headed by the Ministry of industry, energy and small and medium
enterprises, was conferred the supervision of the project. STEG, CNSTN and other
relevant organisations and administrations are member of this task force. Also a working
group set up by the CNEA was charged with elaborating the legal and institutional
framework of the project. Also STEG created a project team to conduct the studies and
field operations.
3. NATIONAL LAWS AND REGULATIONS
3.1. Regulatory framework
2. Law No. 57-10 of 09/08/1957 related on the ratification of the Statute of the
International Agency of Atomic Energy
3. Law No. 70-5 of 03/02/1970 related to the ratification of the Treaty on the Non-
Proliferation of Nuclear Weapons
4. Law No. 71-31 of 28/07/1971 related to the ratification of the treaty prohibiting
the placement of nuclear weapons and other Weapons of Mass Destruction on the
Seabed and the Ocean Floor and in the subsoil
6. Law No. 88-67 of 16/06/1988 related to the ratification of the Vienna Convention
on Early Notification of a Nuclear Accident
7. Law No. 88-68 of 16/06/1988 related to the ratification of the Vienna Convention
on Assistance in Case of a Nuclear Accident or Radiological Emergency
8. Law No. 90-15 of 12/02/1990 related to the ratification of the agreement between
the Republic of Tunisia and the International Atomic Energy and on the
application of safeguards under the Treaty on the Non - Proliferation of Nuclear
Weapons
9. Law n° 96-41 dated on 10 June 1996, related to the Hazardous Waste control its
management and elimination
REFERENCES
APPENDIX 1:
signature
C. On assistance in the case of a nuclear Signed and ratified Law No. 88-68 of
accident 16/06/1988
Comprehensive nuclear test ban treaty Signed and ratified Decree no 2004-
1615 of
12/07/2004
APPENDIX 2:
MAIN ORGANIZATIONS, INSTITUTIONS AND COMPANIES INVOLVED IN
NUCLEAR POWER RELATED ACTIVITIES
Institution Contacts
E-mail : official@cnstn.rnrt.tn
Web Site: www.cnstn.rntn.tn
Fax : +216 71 571 697
Phone : +216 71 577 774
E-mail : dpsc@steg.com.tn
Web Site: www.steg.com.tn
Phone : +216 71 784 488
E-mail : gct@gct.com.tn
Web Site: www.gct.com.tn
Web Site: www.mes.tn
E-mail : api@api.com.tn
web Site: www.industrie.gov.tn
E-mail: INS@mdci.gov.tn
Web Site: www.ins.nat.tn
Adel TRABELSI
Directeur Général
e-mail: adel.trabelsi@cnstn.rnrt.tn
Environmental issues
Abstract
Since the United Nations Conference on Environment and Development held its
Rio meeting in 1992, where participants discussed the necessity of fighting against
the hazardous effects of pollution and climate change, these issues have become
even more pressing world-wide. The ever-increasing consumption of energy is
depleting the planet’s natural capital to a degree that could impact our future
prosperity. According to the 2008 Living Planet Report, if demands for energy
were to continue to grow at their current rates, by the mid-2030s we would need
the equivalent of two planets to meet our global supply needs. 1
The rising level of energy consumption that is occurring internationally also is
being mirrored at regional and national levels. An interesting case study along
these lines is Tunisia, which is one of the high-growth economies in the Middle
East and North African area yet lacks sufficient energy supply to satisfy its
growing demand. Tunisia looks like many nations around the world with a young
population, growing economy, increasing domestic energy consumption, and the
need to balance economic development with environmental concerns.
Keywords
Energy
Pollution
Economic development
Tunisia
Relationship
1. Introduction
Climate change has received great attention during the last decade for its impacts
on human ecosystem and on the economy. One of the most questions worried out
the researchers is: How can we attenuate negatives effects of climate change
caused by CO2 emissions? The world wide has discover the danger of climate
change and the necessity to develop meaningful and rigorous policies and
procedures whose primary objective is protecting environment and attenuating gas
emissions at the atmosphere. The Johannesburg Summit 2002 on sustainable
development reaffirmed the central role of energy as an engine of economic
development, social equality and poverty alleviation. In this Summit, it was
pointed out the disastrous and harmful impact of energy as a cause of pollution and
over exploitation of resources on human health and the environment. The action
plan of Johannesburg Summit 2002 has reaffirmed after the commission on
sustainable development in its ninth session in 2001, the necessity of developing
policies and regulatory frameworks that create economic, social and institutional
conditions required for expanded access to reliable energy services and
environmental friendly. Research in the link between energy consumption,
economic growth and CO2 emissions has widely analyzed and it was been center
of controversial and debate. Energy and climate change are intrinsically linked.
The way in which we consume energy largely determines society’s environmental
impact. For this reason, examining energy use is one of the most fundamental ways
that can help in obtaining sustainable development. The awareness on climate
change and its repercussions makes it essential that there is some understanding of
the causal effects of energy consumption on development. This paper begins with a
brief review of the literature on causality link between economic growth, energy
consumption and CO2 emissions. The next section highlights data and
methodology and empirical results and the last one concludes and states the policy
implications of the results.
2. Literature review
The relationship between energy consumption and economic growth, as well as
economic growth and environmental pollution, has been one of the most widely
investigated in the economic literature in the three last decades. However, existing
outcomes have varied considerably. Whether energy consumption stimulates,
retards or is neutral to economic activities has motivated curiosity and interest
among economists and policy analysts to investigate the direction
of causality between energy consumption and economic variables. The pioneer
study by Kraft and Kraft (1978) found a uni-directional Granger causality running
from output to energy consumption for the United States using data for the period
1947–1974. The empirical outcomes of the subsequent studies on this subject
which differ in terms of the time period covered, country chosen, econometric
techniques employed, and the proxy variables used in the estimation, have reported
mixed results and supports and is not conclusive to present policy recommendation
that can be applied across countries. Depend upon the direction of causality; the
policy implications can be considerable from the point of view of energy
conservation, emission reduction and economic performance. Most of the analyses
on this topic have recently been conducted using Vector Autoregression (VAR)
models. Earlier empirical works have used Granger (1969) or Sims (1972) tests to
test whether energy use causes economic growth or whether energy use is
determined by the level of output (Akarca and Long, 1980a, Akarca and Long,
1980b, Yu and Hwang, 1984). Their empirical findings are generally inconclusive.
Where significant results were obtained they indicate that causality runs from
output to energy use. With advances in time series econometric techniques, more
recent studies have tended to focus on vector error-correction model (ECM) and
the cointegration approach. Masih and Masih (1996) used cointegration analysis to
study this relationship in a group of six Asian countries and found cointegration
between energy use and GDP in India, Pakistan, and Indonesia. No cointegration is
found in the case of Malaysia, Singapore and the Philippines. The flow of causality
is found to be running from energy to GDP in India and from GDP to energy in
Pakistan and Indonesia. Using trivariate approach based on demand
functions, Asafu-Adjaye, 2000a, Asafu-Adjaye, 2000b tested the causal
relationship between energy use and income in four Asian countries using
cointegration and errorcorrection analysis. He found that causality runs from
energy to income in India and Indonesia, and a bidirectional causality in Thailand
and the Philippines. Stern (2000) undertakes a cointegration analysis to conclude
that energy is a limiting factor for growth, as a reduction in energy supply tends to
reduce output. Yang, 2000a, Yang, 2000b considers the causal relationship
between different types of energy consumption and GDP in Taiwan for the period
1954–1997. Using different types of energy consumption he found a bi-directional
causality between energy and GDP. This result contradicts with Cheng and Lai,
1997a, Cheng and Lai, 1997b who found that there is a uni-directional causal
relationship from GDP to energy use in Taiwan. Soytas and Sari (2003) discovered
bidirectional causality in Argentina, causality running from GDP to energy
consumption in Italy and Korea, and from energy consumption to GDP in Turkey,
France, Germany and Japan. Paul and Bhattacharya, 2004a, Paul and Bhattacharya,
2004b found bidirectional causality between energy consumption and economic
growth in India. Wolde-Rufael (2005) investigates the long-run and causal
relationship between real. Using cointegration analysis, Wietze and Van Montfort
(2007) show that energy consumption and GDP are co-integrated in Turkey over
the period 1970–2003 and found a unidirectional causality running from GDP to
energy consumption indicating that energy saving would not harm economic
growth in Turkey. The relationship between output and pollution level has also
been well discussed in the literature of Environmental Kuznets Curve (EKC) where
environmental degradation initially increases with the level of per capita income,
reaches a turning point, and then declines with further increases in per capita
income (Grossman and Krueger, 1991a, Grossman and Krueger, 1991b, Shafik and
Bandyopadhyay, 1992). The conclusions of Hettige et al. (1992), Cropper and
Griffiths (1994), Selden and Song (1994) and Grossman and Krueger (1995) are
consistent with the EKC hypothesis. Martinez-Zarzoso and Bengochea-Morancho
(2004) find evidence that CO2 emissions and national income are negatively
related at low income levels, but positively related at high-income levels.
However, increased national income level does not necessarily warrant greater
efforts to contain the emissions of pollutants. The empirical results of Shafik
(1994) and Holtz-Eakin and Selden (1995) show that pollutant emissions are
monotonically increasing with income levels. The existing literature reveals that
empirical finding studies differ substantially and are not conclusive to present
policy recommendation that can be applied across countries. In addition, few
studies focus to test the nexus of output–energy and output–environmental
degradation under the same integrated framework. Given that energy consumption
has a direct impact on the level of environmental pollution, the above discussion
highlights the importance of linking these two strands of literatures together (Ang,
2007 and 2008). Consequently, to avoid problems of misspecification, these two
hypotheses must be tested under the same framework. This study for the case of
Tunisian economy tries overcoming the shortcoming literature related with the
linkage between economic growth, energy consumption and pollutant emissions
under the same integrated framework, following the idea of Ang (2007 and 2008).
Tunisia appears to be an interesting case study given that it is one of the highest
growth economies in Middle East and North Africa region and energy supply in
this country is insufficient to meet the increasing demand. Also, this empirical
country study may be useful to formulate policy recommendation from the point of
view of energy conservation, emission reduction and economic performance.
3. Tunisian economic and energy situations
The Energy and Environmental Situation in Tunisia: Tunisia is a country with
limited natural resources confronted not only with continually increasing domestic
energy demand but also with geopolitical and geo-economic upheavals that this
sector has experienced. The energy sector is strategic and indispensable to Tunisian
socioeconomic development, where the energy balance has started to show a
deficit after having maintained a surplus for a period of four decades. Fig. 1 shows
the trend of Tunisian demand outstripping resource supply. According to
predictions, Tunisia’s energy needs will continue to increase at a steady pace,
which can be partially explained by the improvement in citizens’ standard of
living, whereas the national production is decreasing, which means that any
durable development in Tunisia should rely, in the years to come, on new growth
sources.
With its annual GDP growth rate exceeding 5% since 1995, Tunisia is among
North African countries with the strongest growth potential. The improvement in
Tunisian major macroeconomic indicators is the result of a series of economic
reforms and prudent macroeconomic management (principally since the adoption
and implementation of the structural adjustment program). The Tunisian economy
is now diversified and less vulnerable than in the past to external shocks such as
climate hazards. Agriculture accounted for 12% of GDP in 2006. The
manufacturing sector accounted for more than 60% of industrial production, about
20% of the working population and 18.2% of GDP. The services sector represents
about 40% of GDP and half of the working population. It has expanded
significantly in the past few years and has driven Tunisian growth upwards. At
the sectoral level, growth in the last years was driven by strong domestic and
European demand. It was primarily stimulated by services (telecommunications in
particular), machinery and electricity industries, and construction and civil
engineering. Over the years, the manufacturing and tourist sectors have gained a
few percentage points of GDP to the detriment of the primary sector (agriculture,
oil and phosphates). In Tunisia, demand for energy, notably electricity, has risen
sharply during the last years. Household consumption has been the main engine of
growth; it represented 63.8% of GDP in 2006 (up 8.8% from 2005). The increase
of total primary energy consumption for the 1990–2005 period was very strong due
to the rapid economic growth caused by increased tourism, transportation and
industrial activities, as well as the increase in the standard of living of the Tunisian
population.
Global intergration
Executive Summary i. Tunisia’s past integration policies brought important economic benefits to the
country. However, significant challenges remain. Thanks to a policy of gradual opening to the global
economy, Tunisia’s exports, particularly manufactures, have become more competitive in global
markets, and trade costs have been falling steadily towards all partners since 1995.The country saw
also a significant increase in FDI flows in the manufacturing sector, including substantial rise of the
textiles/clothing and mechanical/electrical components through participation to EU production
networks. Increased exports and FDI inflows were the main drivers1 of economic growth, which
averaged over 5 percent following the opening of the country to international trade2 . These
changes, however, have remained limited. Tunisia’s integration with the global economy remains
superficial, both in quantities and sophistication of exports. In a sense, Tunisia does not ‘produce’ its
manufacturing exports. It is mostly serving as a re-exporting hub for products originated and sold
elsewhere —mainly France and Italy3 . This highly skewed trade pattern reflects the duality of the
Tunisian economy, which has become increasingly concentrated towards low value added activities4
. Geographic diversification of exports has also been very limited, with the EU absorbing nearly 80
percent of Tunisia’s exports and, within the EU, France and Italy accounting for more than 55
percent of total exports. ii. Policy related obstacles to competitive trade in both goods and services
persist. Heavy and pervasive intervention by the State in the economy continues to limit competition
in the onshore sector and trade integration, particularly in services sectors. Widespread restrictions
to the number of firms allowed to operate in the market have been coupled with many legal (public)
monopolies and undue regulatory constraints, severely limiting competition. In fact, sectors in which
investment faces restrictions account for over 50 percent of the Tunisian economy, whether through
the Investment Incentives Code, the Competition Law or specific sectoral legislation5 . Many of these
sectors at present remain de facto closed to competition6 . In this context, the onshore sector is
operating at a low-efficiency/productivity levels and is preventing other sectors and the economy as
a whole from increasing productivity and value added7 . iii. These challenges put the country at risk
of gradually losing ground vis-à-vis its competitors. The framework for international trade has
changed dramatically in the past decade. Traditional trade implied the exchange of goods produced
in one country that were to be sold in another. Today the world is rapidly moving towards global
supply-chain trade, where goods are produced globally. This type of trade, which involves strong
complementarities at the international 1 Together with large public investments and private
consumption 2 Real GDP growth from 1995 to 2008 (source: WDI) 3 Tunisia DPR, WB 2013 4
Companies from Europe have outsourced the assembly tasks and other low value added tasks to
Tunisia, taking advantage of the very favorable offshore tax regime, the availability of cheap low-
skilled human resources and the subsidized energy. This has made extremely difficult to move
beyond assembly tasks and low value added processes. 5 See Chapters two and three of this report 6
Tunisia DPR, WB 2013 7 A forthcoming study (Weak links in Tunisia 2014) shows the role of low
productivity sectors, mostly located onshore and characterized by lack of market access and
consequent distorted market power, as a constrain to the overall productivity of the economy. This
is particularly the case for downstream sectors that provide intermediate inputs to final production,
which then act as a drag on increasing productivity of the upstream sectors and hurt also prospects
to climb up the value added chain. vi level (with production processes split across countries), has
rendered obsolete the old model of “exchange of market access” between FTA partners (which has
largely driven Tunisia’s opening to the world). The political economy of regionalism has changed and
the new ‘trade-investmentservice” nexus made possible by the IT revolution has ushered a new
bargain, one of “foreign factories for domestic reforms” (Baldwin 2011). In this context, protection in
goods and services markets leads to exclusion from partaking in the growing supply-chain trade.
Behind-the-border reforms and institutions are more than ever necessary to attract FDI to obtain the
‘backbone’ services necessary to participate effectively in the world trading system. Openness in
services is therefore key to benefit from openness in goods markets since these services are bundled
in goods trade. Countries that have realized this have progressed much faster than Tunisia and have
become more competitive in global markets8 . iv. Tunisia needs to re-assess its global integration
strategy. While the perception in Tunisia is that economic growth has been characterized by trade
integration and strong export performance, in fact trade integration remains highly limited and
export performance has been deteriorating. Tunisian export growth during 2000 to 2010 was
positive (3.3 percent) but slower than export growth in many other countries and also slower than
Tunisian GDP growth. In fact Tunisia’s share of goods exports in world trade has been declining over
the past decade. As shown in this report, Tunisia’s trade costs have declined regularly over the past
two decades, but the trade costs of competitors have generally fallen faster so that Tunisia has not
increased its competitiveness vis-à-vis comparator groups and, if anything, it might have lost ground
over the period. As a small economy of just over 10 million people, greater integration in the global
economy remains critical to Tunisia’s economic success. Hence, the need to re-assess its global
integration: the ultimate objective is for Tunisia to strategically use its preferential partners to break
into global markets, particularly in a context where production takes place increasingly through
global value chains. v. With the neighboring European Single Market accounting for a quarter of
world trade and outward investment, deeper integration with the EU should remain a core element
of Tunisia’s integration strategy. The European Neighborhood Policy (2004) offers the EU's neighbors
the prospect of a significant measure of economic integration through gradual integration in the
internal market and deepening of political, cultural and social cooperation. Beyond the ongoing
negotiations, or preparations for negotiations in the areas of trade in agriculture and trade in
services, the EU formally opened discussion on a Deep and Comprehensive Free Trade Agreements
(DCFTA) with Tunisia. The DCFTA will be a comprehensive agreement on trade and economic
relations covering a full range of regulatory areas, such as trade facilitation, technical barriers to
trade, sanitary and phytosanitary measures, investment protection, public procurement and
competition policy. The main objective will be the progressive integration of the economy of Tunisia
into the EU single market. This constitutes an opportunity to further open Tunisia and make it more
competitive in global markets. Further integration with the EU would require the implementation of
comprehensive policy reforms to improve the investment climate, raise productivity, and eliminate a
host of trade barriers. Main Findings Gains from deep and multilateral trade liberalization are
estimated to be substantial for Tunisia, considerably above those from shallow liberalization.
Estimates from an economy-wide 8 These countries, considered as a benchmark to Tunisia based on
either the economic structure, similar factor endowments or the range of income level, include
Chile, Slovak Republic, Poland, Turkey, Malaysia and Korea. vii simulation model for this report- that
takes into account the linkages between goods trade and services trade- show that deep integration
(i.e. including the removal of non-tariff barriers) and multilateral goods trade liberalization would
generate a significant increase in output and in household welfare (respectively 10 and 12 percent).
The greatest benefits are likely to come from deep (in contrast with shallow) liberalization of both
goods and services. The EU remains the preferred partner for Tunisia and the EU market likely to
generate the largest gains from deeper integration9 . More specifically: • Significant benefits would
accrue from the reduction in non-tariff measures (NTMs). NTMs are a drag on trade in commodities
and do not result in government revenues. Thus, eliminating NTMs substantially improves the
outcomes of either MFN or preferential trade agreements. For instance, while shallow MFN
liberalization was found to improve welfare from 1 to 5 percent, deep MFN liberalization that
includes NTMs improves welfare between 8 and 9 percent. • Services trade magnifies the gains from
deep goods trade liberalization and is particularly beneficial for wage and salary earners. Welfare
gains from liberalization in services are in the range of 2-3 percent but could reach 11-14 percent in
the case of joint MFN in goods and services trade. Foreign investment into services would result in
increased local demand for labor, pushing up wages and salaries significantly, by about 18
percent10; vi. The cost of non-reform is therefore very high. The background papers prepared for
this report assess the main regulatory and institutional bottlenecks that still prevent the country
from reaping the benefits from greater and deeper integration with regional partners, primarily the
EU. In the case of services, this report identifies both horizontal and sectoral policies to move
towards a more competitive environment and identifies the potential costs (in terms of lost benefits)
of not moving forward with this agenda. A number of reform options to the current competition
policy framework have also been identified that would broaden the country’s engagement with the
global economy. Most of the reforms to remove these bottlenecks are domestic ones and the key
ones could be undertaken unilaterally. However, international and regional trade integration would
strengthen this process by helping to build consensus and locking in these necessary reforms. vii.
The sequencing of reforms is very important: trade liberalization should be preceded by reforms of
the business environment and competition at large. Opening a services sector to 9 In all
liberalization scenarios, the greatest gains would come either from multilateral liberalization or from
regional integration with the EU 10 Positive welfare implications of services liberalization are even
larger if competition can be allowed and guaranteed between providers. It is important to note
though that these scenarios do not take into account the specific nature of services trade
liberalization. Studies by Konan and Maskus (2003a) and Konan and van Assche (2007) indicate
market structure and regulations play a significant role in the liberalization of services, particularly
for Mode 3. For instance simulation of welfare implication of allowing foreign providers to enter
Tunisia's key services sectors (in this case telecommunication) shows that the welfare implications
are clearly positive if competition can be guaranteed between providers. Welfare gains can be up to
0.65 percent if the foreign provider is 15 percent more efficient than the domestic incumbent and
does not shift its profits abroad. In contrast, services liberalization would be welfare deteriorating if
the foreign provider colludes with the domestic incumbent. These findings highlight the importance
of implementing services liberalization in a suitable regulatory (competition enhancing) framework.
viii domestic (e.g. privatization or suppression of a public monopoly) and/or foreign competition
without paying attention to the domestic regulatory and competition environment could have
negative effects, allowing for example anti-competitive behaviors and price increases. Transitioning
from a rent system, the government needs to ensure that regulatory reforms are effective to
guarantee greater competition and remedy market failures. The scope of the reforms goes beyond
negotiations in preferential trade agreements and should be on the agenda of the government at
large, and include all line Ministries involved in the reform process, with the Ministry of Trade
playing a pivotal role. viii. It is essential to coordinate reforms under multiple ongoing agreements
and negotiations. Multilateral concessions (engagements) are seen as a first best, topped up by
some “open regionalism”. Tunisia is under pressure to carry out reforms in multiple spheres:
domestic reform agenda; bilateral/ regional trade negotiations; WTO negotiations, etc. Sometime,
the concessions asked from individual countries could be conflicting – for instance if market access is
granted on a preferential basis. There is a risk that the multiplication of Preferential Trade
Agreements (PTAs) will generate conflicting rules or add to the complexity of trade (e.g.
administrative burden attached to conflicting rules of origin across PTAs). Greater transparency and
information sharing should help the prevention of such conflicts. It is however recommended to
favor multilateral concessions (i.e. in the GATS) that could be topped-up by some “open regionalism”
and avoid discrimination. ix. The international dimension of market access must be reflected also in
the ongoing reform of the national public procurement system. Public procurement plays an
increasingly important role in the global economy. Each year, it can be estimated that approximately
US$4,000 billion is devoted to purchases through public procurement, including 2,288 billion Euros
in 2009 for the countries of the European Union and US$535 billion in 2010 for the U.S Federal
Government. The stakes are thus quite sizeable, as on average public procurement represents 15
percent of the GDP in these countries. The figures are even higher in developing countries where
public investment remains the key driver of national growth. Public procurement bears economic
leverage through targeted social and economic actions, offers market prospects to the private
sector, can help to generate budget savings through adequate reforms, and has a key role in
development and in the fight against corruption. For these reasons it has been given increasing
international attention during the recent years, and several countries have launched national reform
programs. x. For Tunisia, the negotiations for access to its public procurement and of its own
companies’ access to public procurement in other countries clearly show these stakes. The
preliminary discussions with the European Union and the United States have shown the same to be
true for its partners. Therefore the topic requires all the more attention, especially as the
assessment of Tunisia’s public procurement system that launched in 2011, after regulations of public
procurement had been revised to boost public investment, is currently at the recommendation
phase for comprehensive reforms in national procedures, while the introduction of e-signature
procedures for procurements are also being planned. At this stage, it is important to include an
international component into the public procurement reform in Tunisia. At the moment, however,
there is no international or regional dimension in terms of access to public procurement. The US and
EU currently rely on an international model (the UN General Agreement on Public Procurement, or
GPA) which could also inspire future bilateral negotiations. To the extent some countries in the
region are also in bilateral negotiations with the EU or the US, the regional dimension will inevitably
emerge. ix xi. Tunisia might ensure the consistency of the conditions to access its public
procurement system to avoid the stacking of different rules that would be specific to specific
agreements. It is also recommended to reduce any risk of misinterpretation due to lack of clarity in
the legal texts and regulations of the country in this field. The current regulatory framework does in
fact hesitate between openness and protectionism. It is important to reduce any uncertainty and
spell out the conditions for access of foreign companies. Conclusion xii. The political and economic
events since January 2011 have contributed to change the context in which Tunisia is shaping its
own global integration agenda. This changing landscape presents new challenges but also
opportunities to advance integration in a rapidly globalizing world trade environment. On one side,
Tunisia has a great deal to gain from deepening trade and economic integration with its regional and
global partners: trade and investment are in fact a key engine of sustainable growth and
employment creation. On the other side, this report argues that Tunisia won’t be in the position to
fully gain from deeper integration if trade and investment restrictions, a legacy from the old
economic and political model, persist and continue to prevent a more efficient allocation of
resources. Firms and economic agents, and by extensions Tunisians households, cannot benefit from
increased market opening if competition remains stifled and market opportunities limited by an
uneven domestic regulatory environment.