When the global financial crisis hit, many nations saw a drastic decrease in their national wealth. While Tunisia suffered a slight decline in GDP by the end of 2008, its losses were not even close percentage-wise to those of other developed nations. The key to Tunisia’s economic resilience may be due to the fact that it is still undergoing a period of rapid economic growth and development. It may also be due to the fact that Tunisia’s economic backbone is based primarily on a labor-intensive workforce, and boasts a diversified economy with minimal exposure to the finance industry. Whatever the reason, Tunisia provides a strong example of what steps should be taken in order to get a country on the track to economic growth.
The diversifying of Tunisia’s economy has led to it becoming the 36th most globally competitive country in the world, and the most globally competitive country in Africa. Although Tunisia is poorly endowed with natural resources, it has focused on developing labor-intensive and export-oriented manufacturing sectors without neglecting its agricultural roots. Additionally, Tunisia, a predominantly Islamic country (98%), has also advocated and advanced female participation in the labor pool.
Perhaps Tunisia’s most significant action was pro-poor public spending. This allowed the nation to train a relatively skilled workforce to drive the expanding manufacturing and construction sectors. Then, following a liberalization of prices by the government, these manufacturing workers were better able to purchase the agricultural goods of the farmers, and the farmers were able to purchase the commodities produced by the manufacturing workers. These changes also allowed for Tunisia's exports to jump 20% in 2008.
Since every country has different endowments and different economic situations, it is difficult to advocate mimicking Tunisia completely. However, it is hard to argue with the economic results wrought from the liberalization of prices, reduction of tariffs, and creation of a skilled workforce. Governments of other developing nations should take a long, hard look at Tunisia’s rise to economic prominence and ask themselves what they can do to reach a similar plateau.
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