Jump Starting Tunisia’s Economic Growth

Youssef Chahed, the Arab world’s youngest head of government and a 41-year-old PhD holder in agricultural economics, led the decentralisation program as Tunisia’s Minister of Local Affairs under the government of his predecessor, Habib Essid. This experience arms him in his new role as prime minister with an understanding of Tunisia’s deep bureaucracy and uneven resource distribution among the country’s regions. This is one of the areas where his newly formed government has to make major reforms to respond to increasingly urgent local demands.

The new head of government navigated Tunisia’s political waters, bringing together leftists, centrists, and Islamists to form a national unity government. While the formation did not meet unanimous approval, it has the merit of including young talents and a larger representation of women than any previous Tunisian government and receiving a broad parliamentary blessing. The question remains whether Chahed will have the required leadership to make this team work together (rather than follow individual or party agendas) and score early victories to gain much needed public trust for the more challenging economic reforms to come.

In facing some of the country’s most persistent challenges: administration reform, truly combatting corruption within and outside the state structures, fostering regional equity, finding common ground between the demands of UGTT (Tunisia’s labour union) and the private sector interests of the employers’ union, UTICA, Chahed’s government cannot lose sight of two essential ingredients for an economically robust Tunisia: a responsible management of the country’s resources and building a culture of entrepreneurship that allows for small and medium enterprises to flourish and grow as vectors for social justice.

A refreshing change in the Tunisian government’s approach, and the key to building better relations with the population, is open and effective communication. In his pre-vote speech to the Assembly of the Representatives of the People (ARP), Chahed warned that if some economic benchmarks are not met by 2017, austerity measures will be implemented. To combat a rising frustration among communities living in already undeveloped and underfunded regions, a clearly articulated description of the principles shaping and the outcomes intended for these policies will have to be addressed to the people. A checklist of identifiable and measurable objectives for the government’s first 100 and 200 days will also help foster accountability and trust.

For effective communication to count, effective policy execution is necessary. The urgency of Tunisia’s economic situation warrants expedited delivery mechanisms that facilitate negotiations with local and foreign investors without losing track of transparency and national interests. Investors, politicians, and the public at large have lamented the antiquated bureaucratic procedures that prevent quick actions and often leave more room for corruption. Youssef Chahed has the opportunity to strike two major wins by combining his anti-corruption focus with a streamlined economic delivery plan.

The proposal of an economic delivery unit at the level of the prime ministry has been suggested by professionals and analysts within Tunisia, the World Bank, and the Carnegie Endowment for International Peace. The task force would fast track large quick-win focused projects that target regional investment and employment. Armed with an anti-corruption mechanism, seeking socially responsible corporations, staffed with professionals and public servants whose profiles show excellent management performance and a trustworthy background, this mechanism can provide the Chahed government with the opportunity to regain trust, spur economic growth, and create employment in high-potential yet long-neglected regions.

This unit becomes more relevant considering that Tunisia is preparing an International Investment Conference for November 29 and 30, which represents yet another opportunity for an exercise in establishing identifiable and measurable goals (such as concrete deals made upon connecting foreign and local investors with local businesses rather than symbolic pledges or meaningless memoranda of understanding). This conference, together with investor-focused economic reforms ratified in parliament (PPP law and investment code in particular), a very recently passed economic emergency law allowing for expedited project delivery as a response to the economic crisis, the prime minister’s pledge to focus on anti-corruption, and anticipated fair dispute resolution mechanisms will offer a vital opportunity to develop an even stronger case for investment in Tunisia.

To fully profit from the potential of this conference, Tunisia’s team needs to better define and understand its target audiences. Not all investors are coming from similar countries and legal systems, or looking for the same things; some seek to expand their markets, while others look to cut costs, and yet others search for very specific skill sets. Building value propositions tailored to each investor group will help extract as much value from the event as possible. Involving Tunisian talents based locally or from the diaspora can be a powerful way to offer insights for the government into what the investors need and what the zones of possible agreement are. Bolstering the government’s understanding of what Tunisia’s comparative advantages are in the region from the investors’ perspectives will be a huge asset for Tunisian negotiators.

A target that the conference should not ignore is that of the Tunisian diaspora as investors. They currently bring immense value to the economy through remittances and, if encouraged and incentivized, they can contribute in bigger ways. Savings accounts, bonds, crowdfunding, and diaspora targeted investment projects for underdeveloped regions, can all be developed and marketed to this important group.

Beyond the conference, monitoring and evaluation mechanisms as well as a dedicated task force that can identify, build, and follow up on opportunities and projects, will be essential.  The success of this conference will be assessed by the capacity of the government and its embassies to properly follow up with investors and investees, in particular through the establishment of dedicated teams of civil servants, and private sector and diaspora representatives, working closely with the Ministry of Development, Investment, and International Cooperation, that will ensure no questions remain unanswered and provide some level of guidance and navigation through the intricacies of the Tunisian bureaucracy.

The diaspora members within these teams can act as their country’s economic ambassadors and can be tasked with linking poles of innovation in Tunisia and abroad, establishing relationships with key investment groups, conducting investment roadshows, practicing economic advocacy for Tunisia around the world and providing lessons learned and best practices to the economic delivery mechanism and other stakeholders in Tunisia.

By improving communication and delivering results, this government will manage to regain public trust; by working on preparation, effective negotiation and drawing on the pool of diverse talents within and outside Tunisia, from both the public and private sectors, it has much to gain from the upcoming investment conference in addition to other international meetings such as the upcoming United Nations General Assembly. The ingredients for success are abundant: this government’s promise of stability, Tunisia’s displayed ability to use dialogue to resolve all issues peacefully, its inherent strengths resulting from a vigilant civil society, strong middle class, educated, active women and youth, skilled population and unique geostrategic location, all make a very strong case for Tunisia as a prize investment location.

Ouiem Chettaoui is lead editor at the Tunisian American Young Professionals. Mohamed Malouche is the Board Chairman of the Tunisian American Young Professionals.

Image: A shopkeeper counts money in of his shop at a bazar in Tunis, Tunisia August 10, 2016. (Zoubeir Souissi/Reuters)