Tunisians look for economic lift in private sector

Economists are suggesting the Tunisian president's departure may also help spark greater dynamism in the economy.

The lifting of bureaucratic barriers could bring more investments to Tunisia's private sector. Thibault Camus / AP Photo
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Freedom of expression has been one of the biggest gains for Tunisians since the ousting of Zine el Abidine Ben Ali from the presidency.

Now, as the popular revolution ushers in a new political era, some economists are suggesting his departure may also help spark greater dynamism in the economy. A loosening of the political stranglehold over the private sector could be one direct benefit, they say.

"This can remove all of the negative environment for competition by providing opportunities for more entrepreneurial and open market conditions," said Ann Wyman, the head of emerging markets research for Europe at Nomura, and a resident of Tunisia. "The president and his family created an uncompetitive and non-transparent environment, which stifled entrepreneurial spirit in Tunisia."

Many economists and ratings agencies have scrambled to downgrade their forecasts for the north African country since an uprising led to Mr Ben Ali leaving the country just over a week ago.

The subsequent formation of a unity government has led to renewed hopes of greater political and economic freedom. Tentative signs of increased liberty have already emerged with blocks lifted on previously barred internet sites and press censorship eased.

Now attention is turning to whether any new political system can address some of Tunisia's long-standing problems.

For 23 years, the tentacles of the former president's oppressive regime spread into every aspect of life.

Aspiring entrepreneurs faced a barrage of red tape. The number of entrepreneurs in Tunisia is a tenth of that in Portugal, a country with a similar population.

The difficulty of starting businesses has exacerbated Tunisia's unemployment woes. An estimated 13 per cent of eligible people in the country are out of work.

The country has no shortage of well-educated youngsters but a lack of suitable opportunities is making finding work difficult.

"There needs to be educational reform," said Mohamed Bechri, the principal economist at the UAE Central Bank and a Tunisian national. "People have degrees but they're not in appropriate fields where there's demand, like tourism or textiles."

In addition, many graduates were hampered in the labour market because their degrees were in Arabic, while employers demanded English and French skills, he said.

Another reason for Tunisia's high unemployment has been barriers against foreign businesses in the private sector.

Under the previous regime, an international company wanting to establish itself in the country required a government partner. Carrefour, the French supermarket chain, was one of the few food retailers granted access to the country.

Monopolies on imports of basic goods such as cereal, sugar and tea choked the free market, keeping prices high and limiting consumer choice.

In an effort to appease Tunisians, the government subisidised some food staples.

"The subsidy system is a wasteful use of public money," said Dr Bechri. "What's important is ending monopolies on imports of food."

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