Applied international macroeconomics projet between 1956 1986 - Essay Example

Download file to see previous pages... Tunisia, officially known as the Tunisian Republic, is a country situated on the Mediterranean coast of North Africa, bordering with Algeria to the west and Libya to the southeast. Tunisia got its independence from the French colonialism in March 20, 1956 and Habib Bourguib became the president of new state. He established a strict one-party political system with a strong hold on economy and state resources and their allocation. One of Tunisia’s outstanding characteristics is its remarkable economic development, sustained over many decades and currently driven by a process of market liberalization and integration into world markets (Country Cooperation Strategy for WHO and Tunisia 2005–2009, 2006, p. 7).Historically, Tunisian economy has gone through fluctuating periods of growth and instability. Its has gone through a transition period of a centrally planned to a more privately managed economy and stabilization and later as a structural reform programs.The purpose of following paper is to briefly highlight the important aspects of Tunisian economy during1956 to 1986 period. The paper discusses important economical during this era by splitting it into two sub-periods; namely;- Transition period of a centrally planned to a more privately managed economy and the stabilization (1956- 1970), and - An era of structural reform programs (1971- 1986).Tunisia, officially known as the Tunisian Republic, is situated on the Mediterranean coast of North Africa, bordering with Algeria to the west and Libya to the
southeast. ...
crisis and instability. Its has gone through a transition periods of a centrally planned

economy to a more privately managed economy and the stabilization (since 1956 to

1970) , and structural reform programs 1986-87. W can divide this entire period of

economic developments into two sub- periods namely;

- Transition period of a centrally planned to a more privately managed economy

and the stabilization (1956- 1970), and

- An era of structural reform programs (1971- 1986).

Transition Period of a Centrally Planned to a more Privately Managed

Economy and the Stabilization ;1956- 1970.

At the time of independence in 1956, Tunisia was facing a crippling economic

position mainly because of the huge transfer of money abroad by the wealthy Europeans,

who had left the country. Yet the country and its leadership were quite optimistic and

had strong determination in their potential and progress. They set their targets mainly

focusing on education, modernization agriculture and infrastructure and industrialization

and heavily invested in these sectors. Although these were fine priorities, yet

unfortunately in sixties, they could not reap enough of the benefits to the masses because

of their long term investment requirements and strict government policy control over

theses sectors. During this period per capita income could not increase with an increase in

investment. Government strict policy control over economy resulted a rapid increase of

money supply and aggregate demands. These factors considerable increased the inflation

rate and above all raised foreign payment imbalance.

More than 70% of investment was public. More than half of total investment was

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