Blueprint for wealth creation

New African, Mar 1999

The bedrock of Tunisia's growth,.what Investment Minister Mohamed Ghannouchi calls, "our greatest asset", is the country's skilled labour force. "The best Tunisian investment has been educating its population since independence," he says. "We have one of the highest educational levels in the region. There is one scientific technician per 2,000 inhabitants -- compatible with the rate in Malaysia. Tunisia has also, perhaps, the highest rate of vocational training in Africa.

Given this base of a highly skilled and enterprising workforce, Tunisia has been able to build a formidable manufacturing sector which today accounts for over 50% of exports. Although textiles and leather goods still dominate the manufacturing sector, mechanical and electrical industries are coming rapidly to the fore and there is a thriving computer software industry

"Our economy is more diversified today. The mechanical and electrical industries are expanding at 7% per annum, textiles at 6% and services, transport and especially telecommunications are all growing apace," says Economic Development Minister Baccar.

Tunisia's low-key political profile in a volatile region, its internal stability and a long tradition of excellent foreign relations have made it a natural choice for foreign investments and joint-ventures.

The foreign direct investment (FDI) stock at the end of 1996 was $10bn, half of which came in during the last six years. In 1998, FDI inflow was $800m, $200m in hydrocarbons and $600m in other sectors. The rate of FDI inflows is certain to increase the closer Tunisia gets to joining the European Free Trade Zone. With labour costs and salaries worked out every three years between the trade unions, the employers associations and the state, Tunisia will be a difficult site to ignore for investors looking to tap into a region that has a high-income population of over 350m.

What is Mohamed Ghannouchi's dream ten years from now? "A per capita GDP of $4,000 and virtually full employment," he replies.

Given Tunisia's track record over the last 10 years, this is one dream that seems certain to become a reality.