The Growth Diagnostics in Tunisia - Assignment Example

?The Growth Diagnostic on Tunisia: Background: The clash occurred between the interests of French and Italian and this resulted in the invasion of Tunisia by the French, the people of Tunisia started their struggle for the independence and it continued many years after the World War I and Tunisia was declared as an independent state in 1956. Habib Bourguiba was the 1st president of Tunisia and he established the one-party political system in the country. He ruled Tunisia for more than 30 years, he was quite successful in repressing the Islamic extremism which most of the time is called as Islamic fundamentalism and he provided maximum rights to the women of his country and this move was totally different from all other Arab nations. In the end of 1987, Bourguiba was replaced by Zine el Abidine Ben Ali as the president, he had a smooth time in his government until December 2010 when nationwide protests started over the issues of high rate of unemployment, corruption by the government officials, increasing poverty and increased prices of edibles and fruits and this protest aggravated in jan’2011 which resulted in the killing of hundreds of people. Ben Ali dismissed the government on 14th January 2011 and he left the country on the same day and by the end of Jan’2011, the Prime Minister of the country announced that a National Unity Government will be formed and he announced Fouad M’Bazaa as the president of Tunisia for the interim period. Geography: It is situated in Northern Africa and it is surrounded by the Mediterranean Sea and it is present between Algeria and Libya. On the world map, its geographical coordinates are 34 00 N, 9 00 E. total area of Tunisia is about 163,610 square kilometers which is comparatively larger than Georgia. It shares international boundaries with Libya and Algeria and the span of these boundaries is 459 km and 965 km respectively. Its Coastline spans about 1,148km. Climate of Tunisia is quite variable as in the northern region of the country, the winters are mild and rainy but the summers are dry and warm and in the southern region of the country, there is desert. Tunisia is a blend of hilly regions in the north and there are hot and dry plains and also the semiarid area of southern region of the country which joins the Sahara Desert. Tunisia has a lots of natural resources including petroleum, phosphates and metals like iron ore, lead and zinc. About 17% of the land of this country is used for agricultural proposes. The disposal of toxic and waste material is ineffective and poses a serious risk to the health of the community living in there. Other potential natural hazards include the pollution of the drinking water with the sewage and there are limited amount of fresh water reservoirs, there is a trend towards increase deforestation as well as soil erosion which results into the desertification of the country. Tunisia holds the strategic location in the central portion of the Mediterranean; nowadays, Malta and Tunisia are having mutual talks to make use of the continental shelf between the two countries especially for the exploration of natural resources like Oil. People of Tunisia: The population of Tunisia will be about 10.6 Million in July 2011 and it is 78th biggest country population wise of the world. About 70% of this population is of the productive age i.e. from 15-64 years, the population growth rate of the country will be 0.978% in 2011. The birth rate is 17.4 births/1,000 population and the death rate is 5.83 deaths per 1000 population. Urban population constitutes about 67% of the total population with 1.5% annual rate of urbanization, the major city of Tunisia is its Capital that is Tunis and its population was about 759,000 in 2009. Infant mortality rate of Tunisia is around 26 deaths among every 1000 live births and the life expectancy at birth is about 75 years. As AIDS is quite a prevalent disease in Africa so for information proposes the adult prevalence of AIDS is less than 0.1% in 2009 and the total number of AIDS patients in Tunisia are about 2400; as the prevalence is quite low so as the number of deaths resulting from this disease which are less than 100. About 98% of the population is Arab and the Jewish and the European constitutes the remaining population. About 98% of the population is Muslim while the remaining major religions are Christianity and Jewish. The official language is Arabic which is used for both the communication as well as commercial proposes while French is the language used in the commerce sector. Literacy rate of Tunisia is about 74%, male far ahead from females in literacy showed by the fact that the literacy rate of males is 83.4% while of females is 65.3% in the 2004 census. One of the exemplary factors is the spending of Tunisia in the education sector which is around 7.2% of GDP and Tunisia comes at number 18 in the world in its spending on the education. Transportation: There are about 32 airports in Tunisia and among these; 16 airports are with paved runways. The gas pipeline spans around 2,179km while oil pipeline is about 1,285 km and there is 372 km pipeline for the transport of refined products. The length of the railway track is about 2,100 km and out of this length; 471 km is of standard gauge while 1688 km is of narrow gauge. There are about 19,232 km roadways and among this length, about 12,655 km of roads are paved while 6577 km are unpaved. Tunisia is also striving in the seas and at present it has got 11 merchant marine carriers which include bulk carrier as well as the cargo carrier. The main ports of Tunisia are in Bizerte, Gabes, Rades, Sfax and Skhira. Economy: Tunisia has got multidimensional economy and its main dimensions being the agriculture, mining, tourism and the manufacturing industries. With increasing trends towards privatization the control of the government over the economy has lessened a bit but still it is quite substantial. Proper policies in the social sector have led to an improvement in the standard of living of the Tunisian people when compared to the other countries of the region. The real growth was about 5% in the last decade but it has declined to 3-4% in the last two years as a consequence of decrease demand of Tunisian goods in Europe which is the main market of this country. Apart from this Tunisia has excel in other manufacturing fields lake non-textile industry as well as in the agriculture which has helped Tunisia to recover from the deficits due to decreased growth in the export sector. But Tunisia is facing a large task ahead of providing job opportunities to the youth of the country as the unemployment is on the increase in the country. Other steps which can help in uplifting the economy can be improved efficiency of the government, better monitory policy and to give some freedom in the investment laws to promote foreign investment in the country. World Bank Data: Cash Surplus/Deficit: It is defined as the revenue minus expense minus the net acquisition of the non financial assets. The data regarding last five years is given below This table is indicative of the fact that the expense of Tunisia is more than the revenue of this country which is the main drive for the country to be included in the lower middle class country with respect to the income of the people. Central Government Debt: It is given below in terms of total percentage of GDP. Exports of Goods and Services: It is also given in terms of percentage of GDP. Year Export of Goods & Services 2005 50 2006 50 2007 53 2008 60 2009 52 Foreign Direct Investments: It is an indicator that how much is the inflow of the foreign investment to get a lasting management interest in an enterprise which is operated by some institution run by some party other than the investor. It is the sum of equity capital, reinvestments of earnings and other type of long term and short term capital. It is given in US$. Year Foreign Direct Investment 2005 723,042,931 2006 3,270,261,640 2007 1,531,889,987 2008 2,638,495,303 2009 1,595,452,778 Gross Domestic Product (GDP): GDP is the sum of all the assets added by all the producers residing in that particular country plus the taxes paid by the residents of the country and minus the subsidies which are not included in the price of the products. Year GDP 2005 28,967,848,882 2006 30,962,208,866 2007 35,619,594,067 2008 40,844,817,791 2009 39,560,912,390 Annual GDP Growth: Year Annual GDP Growth 2005 4.0 2006 5.7 2007 6.3 2008 4.6 2009 3.1 Annual GDP Growth: All of the above mentioned indicators are showing that there was a trend of increase growth and foreign investment till 2008 but in 2009 all the parameters including those which are shown above and those which are not shown here are indicative of the fact that there is a trend of decline in the progress of the country economically. The reason behind this is the political disturbance in the country in the last two years which is a setback for the foreign investors and also resulted in the inflation and this tends to increase the trend of taking debts from the developed countries and also from institutions like IMF & World Bank which is the main drive for the country to be among the lower middle class country income wise. According to Tunisia, IMF reported that the growth of Tunisia is expected to touch 3.8% in the year 2010 which declined to 3% in 2009 as a consequence of global downfall of the world economy. But the major threat to Tunisia is its increase rate of unemployment which is still quite high particularly in the young educated group. Tunisia growth can reach 5% annual increase from 2010-2014 if the government policies aim at providing employment to the youth in combination with developing new international markets and provide support to the trade sector so that it may help in flourishing the country’s economy. Despite of the development by Tunisia in the trade sector in last few years and has proven itself to be a competitive economy but the setback here is the downfall in the economy of the Europe as Europe is the largest partner of Tunisia in terms of its exports so the economy faces a serious threat nowadays due to the decline in the trade with the Europe. Comparison of Tunisia with France: The prices of general items are quiet lower in Tunisia as compared to developed countries like France for example consumer prices in Tunisia are about 59% lower than they are in France and if we include the rent in the consumer prices then the difference becomes 62% approximately. The rent of houses and commercial areas are about 77% lower in Tunisia in comparison to France. The rates of hotels and restaurants are about 72% lower in Tunisia. Grocery prices are about 54% lower in Tunisia and these facts are basically resulting from one single factor and that is the purchasing power of the local people of Tunisia which is about 56% lower than the French people. Tunisian Government & Its People: Despite of the presence of democratic system in the country, the citizens of Tunisia do not have the freedom to express themselves politically. The government though is selected by the people of Tunisia through elections but it does not allow people to express themselves and even the print and the electronic media is not free to write or to show something. There are several reports which showed that there are incidents of torture and misbehavior with the prisoners especially the political ones. The trade unions of Tunisia holds important place in the country’s political and social life and these unions have talks with the government directly regarding the employment of the educated youth in the country. The issue of restrictions over the press is so serious in the country that the membership of “The Tunisian Journalist Association” was suspended from International Federation of Journalists for about four years due to the failure in defending the rights of freedom. One of the facts which makes Tunisia ahead of all other Arab nations is the legal and the social status of women of the country, in Tunisia women have full rights to run their businesses and the women over there can have their passports under their own custody and this is the only country in the Arab world where polygamy is not allowed which means a man cannot marry two women at a time. The government of the country urges parents to send their girls to school and this is shown by the fact that about 50% of the university students are females and about 66% of the judges and the lawyers belong to the feminine group. The rights of the Tunisian females were even more protected in 1993 reforms which allowed Tunisian female to transmit their citizenship even if they are living abroad or if they are married to a foreign national. In addition to the rights of females, Tunisian government is spending quite a serious attention on the Family Planning Program of the country and has reduced the growth rate of the country to about 1% per annum which is quite an achievement and its impact is significant in Tunisian economic and social development. Health Sector in Tunisia: During the last fifteen years there have been several reforms in the Tunisian health system and these reforms mainly follow three main principles which include; The continuous development in the sector of primary health care through an organized program to make sure the comprehensive and nationwide delivery of the primary health care services to the country. The improvement in the facilities in the hospitals to provide more elaborate health services to the patients admitted in the wards and it is mainly obtained by the structural reforms in the teaching hospitals in particular. The reforms regarding the laws related to private health care providers. Education Sector in Tunisia: Education holds significant importance in the Tunisian culture and every family whether it is urban or rural thinks of education as the key to a bright and a prosperous future. The teachers work in accordance with the advice of the parents. The education for the 1st nine years i.e. the basic education is necessary for all the Tunisian ages 6-15 according to the law passed in 1991. Multiple other laws have been passed to improve the basic structure of the education sector and special importance has been given to the higher education providing institutes. Major principles of education sector in Tunisia are; 1). Improvement in the educational management system and to ensure the regular evaluation of the system. 2). Promote the trend of decentralization in the education sector. 3). Introduction of the newer education tools in the system like computer and the internet access thus providing suitable conditions for the digitalization of the education system. 4). Emphasis on the basic educational qualification and promotion of interest in new technologies. 5). Continuous teaching programs for the teachers which results in better delivery of the education to the students. References: 1. Africa: Tunisia. Map of Tunisia. 27th March. 2011. 2. CIA. The World Fact Book. Africa: Tunisia. 27th March. 2011. 3. The World Bank. Indicators. 28th March. 2011. 4. IMF. Tunisia Weathers Crisis Well, But Unemployment Persists. 28th March. 2011. 5. Cost of Living Comparison. 28th March. 2011. 6. TDS. Government. 29th March. 2011. 7. Health System Profile: Health System Reforms. 29th March. 2011. 8. State University. Tunisia- Constitutional and Legal Foundations. 30the March. 2011. Read More