March 12, 2015
Celebrating the Economic Potential of the Maghreb
By Mohamed Malouche
These trends and the need to define the objectives, challenges, and potential for success to support sustainable entrepreneurship in the Maghreb, brought more than 300 people to the Investment & Entrepreneurship Conference on March 5 in Tunis. Organized by the Partners for a New Beginning-North Africa Partnership for Economic Opportunity (PNB-NAPEO), the US State Department, and the Tunisian American Chamber of Commerce, business leaders, private and public sector representatives, and other critical stakeholders convened for a day of plenary and breakout sessions, networking, and group discussions.
Featuring special guests, including Madeline Albright and US Secretary of Commerce Penny Pritzker, attendees deliberated on the potential and challenges for growth in key regional economic sectors (including information and communications technology and renewable energy). Participants also examined how to develop an ecosystem that provides long-term support for entrepreneurs throughout North Africa and brainstormed on methods to close the skills gap in the Maghreb, among other deliberations.
This conference was an opportunity for these individuals to foster the partnerships that would drive the region’s transformational economic activity in the coming years.
Challenges and Opportunities for Entrepreneurial Success in Tunisia
The multitude of entrepreneurship-focused events held in Tunisia over the past four years highlights the critical need for economic reform to realize the goals of the revolution and overturn the economic damage created by the former regime. Now is the time to implement the reforms that have been a source of debate over the past few years.
Secretary Pritzker highlighted four key areas that Tunisia in particular needs to tackle under the new government: an investment code likened to a “byzantine maze;” a banking system in critical need of adjustment to avoid cronyism; an inefficient tax and customs system; and the lack of a public-private partnership law. These areas, according to Secretary Pritzker, are holdovers from the former regime and without reform would hinder financial transparency. By undertaking such initiatives, Tunisia “sends a signal to local and global investors that Tunisia is open for business” and can begin to overturn years of corruption in a system that allowed the “discretionary application of the rules.”
Other speakers highlighted the need to revamp an economic system that reinforces the status quo, limits opportunity, and stymies growth and employment rather than facilitating entrepreneurship and innovation. Badreddine Ouali of Vermeg noted that Tunisia’s real problem lies in its capacity of to absorb money, rather than the availability of money. If delays in payment, starting with the government, are reduced to acceptable levels (weeks rather than months) by law, it can significantly improve the overall ecosystem of growth and enable entrepreneurs to sustain their growth.
In addition to these structural reforms, the entrepreneurial ecosystem needs to be honed. For Tunisia to be a viable economic player, its entrepreneurs need better maneuverability between the idea and growth stage. They need to attract and utilize sufficient investment to expand their business operations. At present, many entrepreneurs remain stuck in the early stages of business development, their activities hampered by a highly risk averse investment community. Tunisian efforts for structural reform must accompany an effort supporting a culture of entrepreneurship, marked by collaboration and trust between economic actors. A set of best business practices gleaned through mentorship and conversations with economic success stories can facilitate a marketplace of ideas that could have positive knock-on effects in the Tunisian economy. In the face of such obstacles and the immense potential for economic success, Secretary Pritzker outlined the United States’ commitment to Tunisia’s economic growth.
“I Hope My Message Today is Crystal Clear: America is Your Partner”
Secretary Pritzker announced the creation of a private-public partnership that will promote greater linkages between the United States and Tunisia. It would include targeted programming ranging from pitch competitions with seed funding as the top prize, technical assistance and training for entrepreneurs, career centers, and a Business Reform and Competitiveness Project. Participation in these programs, including training on franchise finance, would encourage banks and investors to commit their capital to these new ventures.
The Regional Initiative to Support Entrepreneurship (RISE), a particularly game-changing new program, leverages partnerships in support of end-to-end entrepreneurial success. With access to finance, trainings, mentoring and other educational and reform components, RISE has the capacity to take US-funded programming to the next level. As the pilot participant, all eyes will fall on Tunisia to see how this program can be replicated in other economically transitioning countries.
What is notable about this project is the role of the Tunisian diaspora. Through this program—particularly through seed financing and mentorship—the diaspora can have a significant role as investors, mentors, and collaborators. With the support of the Tunisian American Young Professionals, the Tunisian diaspora community has the opportunity to share their own set of best business practices, provide a global view of entrepreneurship and market activity, and allow the diaspora to invest directly in new business ventures. Many Tunisian-Americans have found success on Wall Street and Silicon Valley and want to contribute to the development of a sustainable economy. Through RISE, they now have a direct pipeline to entrepreneurs who can most effectively utilize their expertise and business acumen.
By the end of the conference, the attendees, armed with new contacts, potential partners, and an inspiring speech by President Beji Caid Essebsi on the Tunisian path to economic sustainability, were prepared to act and contribute to the vision laid out over the course of the daylong event. It is in the interests of all involved for Tunisia to succeed, and critical stakeholders—both within Tunisia and abroad—are prepared to lead the country to the next stage of sociopolitical development. As Secretary Pritzker explained, reforms will not happen overnight. Regardless, there is much about which to be optimistic. In her words, “This is Tunisia’s moment.”
Mohamed Malouche is the Board Chairman of the Tunisian American Young Professionals (TAYP), a diaspora association seeking to increase economic cooperation, ties, and exchanges between Tunisia and the United States.