Key Challenges and Opportunities for Tunisia’s Development

The World Bank has released its second Systematic Country Diagnostic (SCD) report for Tunisia, titled Rebuilding Trust and Meeting Aspirations for a More Prosperous and Inclusive Tunisia, following the first edition produced in 2015.

These reports are produced for partner countries every five years, thus allowing the identification of key challenges and opportunities to accelerate progress in rebuilding trust, meeting aspirations, and ultimately contributing to the World Bank Group’s twin goals of ending absolute poverty and sustainably boosting shared prosperity.

The SCD is intended to become one of the key references point for consultations on priorities for World Bank country engagement and as a contribution to the public debate regarding Tunisia’s path forward. The findings are derived from a thorough analysis and informed by consultations with relevant stakeholders. “We are grateful to the Government and all relevant stakeholders for their close collaboration and valuable contributions throughout the SCD process. This report forms an important basis for the World Bank’s new Country Partnership Framework (CPF) for Tunisia, which will define our financial and analytical support to Tunisia for the next five years,” said Alexandre Arrobbio, World Bank Country Representative for Tunisia.

The SCD takes an overview of developments in Tunisia over the past ten years, including international benchmarks and medium-term forward-looking analyses. The CSP therefore does not focus extensively on recent events, but rather seeks to place them in the context of underlying trends in equitable growth, poverty reduction, and state capacity. The report discusses the context and record of the past decade before turning to the identification of four prospective pathways for Tunisia in terms of restoring confidence, responding to citizens’ aspirations, and possible responses to the key challenges facing Tunisia. The main points of these four tracks, which are reflected in the current government’s economic reform projects, are summarized below:

  • Citizen participation: To boost service delivery and pave the way for a more sustainable political balance, government could capitalize on strengthening citizen participation, transparency, and local governance.
  • More inclusive institutions: The authorities could accelerate the process of digitization of the economy, of the society and of the public administration. This would make the state more responsive to the aspirations of citizens, especially vulnerable groups living in rural areas, who are lagging behind in development and lack access to quality public services.
  • Move the economy to productivity-led growth: Reversing the results of several years of an unfavorable business climate is one of the objectives that the reform program could seek, in order to open up markets to competition, and modernize the financial and infrastructure sectors. This would promote trade and innovation, while attracting foreign direct investment and climate finance.
  • Increase economic inclusion: The authorities could ensure more equitable access to economic opportunities and improved living standards for citizens. This implies improving learning outcomes, taking measures supporting women’s participation in the labor market to limit gender inequalities, and addressing discrepancies in service delivery, which can lead to better welfare outcomes, increased opportunities, and greater social cohesion.

The preparation of the report relied mainly on two kinds of consultations. On the one hand, direct consultations were carried out particularly in the academic community, opinion makers, and the public administration, which allowed the SCD team to trigger the debate and advocate for the need to implement reforms to help Tunisia overcome its socio-economic challenges. On the other hand, the consultations also included extensive digital engagement based on people’s reactions and perceptions, which allowed for a wider awareness of the situation and the urgency of the reforms.