The Plan: Boost SMEs; The Reality: Boost The State Payroll

A 9 January report from the IMF indicates that in some ways Tunisia has been going in the wrong direction – making it ever more difficult for the government to change course. Governments of recent years have repeatedly spoken of the need to promote private sector growth – almost every loan from multilaterals such as the EBRD has flagged up “boosting SMEs” as a key objective.

But this would require long-term reform. The evidence suggests that successive Tunisian governments have instead gone for the classic Arab quick-fix of cutting unemployment by boosting the state payroll.

The World Bank’s annual ‘Doing Business’ rankings in 2013 pegged Tunisia at a reasonably-respectable fifty-first place, just ahead of Spain. But Tunisia has fallen in the rankings every year since – to #88, in the latest rankings issued in November 2017, just behind Bosnia and Zambia (though ahead of Saudi Arabia which has fallen even further; from 26 in 2013 to 92 in the latest rankings). (CONTINUED - 576 WORDS)