Economy

Tunisia has a diverse economy, with important agricultural, mining, energy, tourism, petroleum, and manufacturing sectors. Governmental control of economic affairs, whilst still heavy, has gradually lessened over the past decade with increasing privatisation, simplification of the tax structure, and a prudent approach to debt. Real growth averaged 5.0% in the 1990s, and inflation is slowing. Increased trade and tourism have been key elements in this steady economic growth.

The government has totally or partially privatised about 160 state-owned enterprises since the privatisation program was launched in 1987. Although the program is supported by the GATT, the government has had to move carefully to avoid mass firings. Unemployment continues to plague Tunisia's economy and is aggravated by a rapidly growing work force. An estimated 55% of the population is under the age of 25. Officially, 15% of the Tunisian work force is unemployed, but the real numbers of jobless or underemployed are higher.

The Tunisian government adopted a unified investment code in 1993 to attract foreign capital. More than 1,600 export-oriented joint venture firms operate in Tunisia to take advantage of relatively low labour costs and preferential access to nearby European markets. Economic links are closest with European countries, which dominate Tunisia's trade. Tunisia's currency, the dinar, is not traded outside Tunisia. However, partial convertibility exists for bonafide commercial and investment transaction. Certain restrictions still limit operations carried out by Tunisian residents.

The Bourse de Tunis is under the control of the state-run Financial Market Council and lists nearly 50 companies. The government offers substantial tax incentives to encourage companies to join the exchange, but expansion is still slow.

In 1996 Tunisia entered into an "Association Agreement" with the European Union (EU) which removed tariff and other trade barriers on most goods by 2008. In conjunction with the Association Agreement, the EU is assisting the Tunisian government's Mise A Niveau (upgrading) program to enhance the productivity of Tunisian businesses and prepare for competition in the global marketplace.

In 1992, Tunisia re-entered the private international capital market for the first time in 6 years, securing a $10-million line of credit for balance-of-payments support. In January 2003 Standard & Poor's affirmed its investment grade credit ratings for Tunisia. The World Economic Forum 2002-03 ranked Tunisia 34th in the Global Competitiveness Index Ratings (two places behind South Africa, the continent's leader). In April 2002, Tunisia's first US dollar-denominated sovereign bond issue since 1997 raised $458 million, with maturity in 2012.