TUNIS, 24 October 2004 — Tunisia’s economy for long has been considered one of the strongest and most stable in the Mediterranean basin, but on the eve of national elections due today the outlook for that sector looks increasingly uncertain.
Though the economy has grown at a healthy average of five percent over the years, earning the country accolades from international institutions including the International Monetary Fund, business leaders are edgy about the future.
“I believe Tunisia is going to be confronted with challenges on the economic front that it never faced before,” said Mahmoud Ben Romdhane, an economics professor at the Tunis university of economics. “Our economy is not what it used to be and growth went down to 3.7 percent in the last three years compared to before when it was five percent,” he added. “Industrial growth has also slowed down (...) because I believe there is an erosion of confidence within the business sector.”
One major concern is the approaching end of the so-called Multifibre Accords signed in the mid 1970s. The accords provided tariff protections that allowed the North African country to export its products, especially textiles, to Europe.
The accords expire in 2005 and with the loss of quota restrictions on textile exports to Europe from Asia, manufacturers here expect stiff competition, mainly from China which will have uninhibited access to key European markets.
“With the dismantling of the Multifiber Accords, Asian production will flood the market,” Romdhane predicted.
Textiles and clothing represent about 50 percent, or three billion euros ($3.8 billion), of Tunisia’s exports and the industry employs about 250,000 people in 2,000 companies. The World Bank has warned that nearly 100,000 jobs could be affected when the Multifiber Accords expire.
The country since 1995 has also been linked to the European Union through a partnership and free trade agreement. As such, Tunisia was the European Union’s fourth biggest textiles suppliers and the main supplier to France until 2003 when China overtook it, according to the Central Bank of Tunisia.
Romdhane, who backs a so-called “democratic initiative” launched by left-wing parties, warned that despite assurances to the contrary from the ruling party, Tunisia was facing a crisis in its economy unless urgent action was taken.
He also said the labor sector was threatened and estimated at 50 percent the rate of unemployment among the country’s new university graduates. Overall the unemployment rate stands at about 15 percent, according to official figures.
