TUNISIA ECONOMIC MONITOR Migration Amid a Challenging Economic Context Fall 2023 Tunisia Economic Monitor Migration Amid a Challenging Economic Context Fall 2023 Middle East and North Africa Region © 2023 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclu- sions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy, completeness, or currency of the data included in this work and does not assume responsibility for any errors, omissions, or discrepancies in the information, or liability with respect to the use of or fail- ure to use the information, methods, processes, or conclusions set forth. 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TABLE OF CONTENTS Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v List of Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .vii Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix Résumé Analytique . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii ‫ ملخص تنفيذي‬. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xvii Part A: Recent Economic Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1. The moderate economic recovery is slowing down further due to drought conditions, uncertain financing conditions and the slow pace of reforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2. More benign global prices and the positive export performance reduced the current account deficit in the first part of 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3. Despite the lower CAD, securing sufficient external financing remains challenging . . . . . . . . . . . . . . . . . . 6 4. Shortages of basic products have continued, partly fueled by the system of subsidies and the drop in agricultural production, going hand in hand with rising debt of state-owned marketing boards. . . . . . .8 5. Inflation moderated somewhat from the record levels of early 2023 but it remains elevated . . . . . . . . . . . 9 6. The budget continues to be under pressure as the low growth affects tax revenues . . . . . . . . . . . . . . . . .11 7. The high public debt continues to put pressure on the domestic banking system . . . . . . . . . . . . . . . . . . .12 8. Growth prospects are worsening as external financing conditions remain challenging . . . . . . . . . . . . . . .14 Part B: Making Migration an Engine of Growth and Development for Tunisia . . . . . . . . . . . . . . . . .17 List of Figures Figure 1 GDP Fell in the Second Quarter of 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Figure 2 Tunisia’ Economic Recovery Has Been Slow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Figure 3 Value Added in the Agricultural Sector Fell Sharply in the First Half of 2023 . . . . . . . . . . . . . . . . . . 4 Figure 5 Unemployment Has Returned to Its (high) Pre-Crisis Level but More Workers Left the Labor market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Figure 4 Agriculture Drove the Slow-Down in Growth in 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 Figure 6 Labor Market Outcomes Are Particularly Adverse for Women . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 Figure 7 Mechanic Industries Led the Moderation of the Merchandise Trade Deficit in 2023 . . . . . . . . . . . .5 iii Figure 8 The Main Tunisian Exports Benefited from Price Hikes in 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Figure 9 Energy Account for an Increasingly Dominant Share of the Trade Deficit . . . . . . . . . . . . . . . . . . . . . 6 Figure 10 The Trade Deficit Along with Tourism Receipts Helped Reduce the Current Account Deficit . . . . 6 Figure 11 With Weak FDI and Portfolio Flows, Tunisia Relied on Sovereign Borrowing to cover its External Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Figure 12 Amid Pressures on External Financing Needs the Dinar Remained Relatively Stable . . . . . . . . . . .7 Figure 13 BNA Credits to Office Des Céréales Increased Almost Four-Fold Since 2019 . . . . . . . . . . . . . . . . . 8 Figure 14 Hard Wheat Imports Remained Flat Even in the Face of a Significant Drop in domestic Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 Figure 15 Without Considering Processing Costs, the Purchasing Price of Wheat Is Lower than Consumer Price for the Baguette Since 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Figure 16 Inflation Started to Decline in 2023 but it Remains High . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Figure 17 Unlike other Countries, Food Inflation in Tunisia Increased Over the Last Year Percentage Point Change (y-o-y), August 2023 vs. 12 Months Ago . . . . . . . . . . . . . . . . . . . . . . . . . 10 Figure 18 The Hike in Consumer Prices During 2021–2023 Was Correlated with neither Money Growth nor Credit Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Figure 19 Tax Revenues Under-Performed in the First Half of 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 Figure 20 A Tale of Two Expenditures: Subsidies Versus Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . 12 Figure 21 The Share of Net Government Receivables in Total Credits Continues to Increase as Credit Growth Falters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Figure 22 The Number of Tunisians Living Abroad has Historically Been Significantly Higher than Foreigners Residing in Tunisia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Figure 23 Irregular Migration of Tunisians to Europe has Been Increasing Since 2019 . . . . . . . . . . . . . . . . . 19 Figure 24 Remittances have Consistently Been the Most Important Foreign Financial Inflow for Tunisia 19 Figure 25 Immigrants’ Stock in Tunisia Remains Relatively Low as a Share of the Resident Population 20 Figure 26 Tunisia’s Population Is Rapidly Aging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Figure 27 Tunisia Granted Fewer Work Authorizations in a Period of Increasing Immigration . . . . . . . . . . . . 22 Figure 28 In 2023 Tunisia has Become the Most Important Departure Point for irregular Migrants’ Crossing to Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Figure 29 Tunisians Account for a Minority of Arrivals from Tunisia Since the Last Quarter 2022 . . . . . . . . .23 List of Boxes Box 1 Adapting to More Frequent and Severe Water Shortages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Box 2 The Rebound of International Tourism to Tunisia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Box 3 The Loss-Making Business of Selling Baguettes in Tunisia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Box 4 Rising BNA Exposure to the Office Des Céréales Likely Undermining the bank’s activity . . . . . . 13 Box 5 Tunisia’s Legal Framework of Migration and Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 List of Tables Table 1 Key Macroeconomic Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 iv TUNISIA ECONOMIC MONITOR – MIGRATION AMID A CHALLENGING ECONOMIC CONTEXT ACKNOWLEDGEMENTS The Tunisia Economic Monitor (TEM) is a report that tant, MTI), and - for part B: Federica Alfani (Economist, provides information on recent economic develop- Poverty) and Gabriele Restelli (Consultant, Poverty). ments and policies in Tunisia, as well as the country’s The report was prepared under the direction of Jesko economic outlook and challenges to its development. Hentschel (Country Director, Maghreb), Eric Le Bor- The report is aimed at a diverse audience, includ- gne (Practice Manager, MTI), Alexandre Arrobbio ing policy makers, business leaders, financial mar- (Resident Representative, Tunisia), and Abdoulaye Sy ket actors, and analysts and professionals working on (Lead Economist, MTI), with administrative support or in Tunisia. It is produced by the North Africa and from Jawhar Abidi (Consultant, MTI). The report has Middle East department of the World Bank Group’s also benefited from inputs by Paola Barsanti, Aude Macroeconomics, Trade and Investment (MTI) global Galli, Ahmed Messaoudi and Quy Toan-Do. practice. The opinions and conclusions expressed in Each issue of the TEM contains a section on this report are those of the World Bank staff and do recent economic developments and a discussion on not necessarily represent the views of members of the the economic outlook, followed by a special section World Bank Board of Directors or the countries they based on the World Bank’s analysis of Tunisia. The represent. report was originally published in English with the title For information on the World Bank and its activ- “Migration amid challenging economic conditions” ities in Tunisia, please visit: https://www.worldbank. and was first published in 2023. In case of any discrep- org/en/country/tunisia or https://www.albankaldawli. ancy, the original English language version prevails. org/ar/country/tunisia (Arabic). For questions or com- The report is authored by a team led by Massi- ments on the content of this publication, please con- miliano Calì (Senior Economist, MTI) and Mohamed tact Massimiliano Cali (mcali@worldbank.org) or Eric Habib Zitouna (Consultant, MTI). The team also Le Borgne (eleborgne@worldbank.org). includes Riadh Ammari (Communications Specialist, The deadline for input and forecast preparation External Affairs) and Fatma Marrakchi Charfi (Consul- is October 9, 2023. v LIST OF ACRONYMS BNA Banque Nationale Agricole MMP Missing Migrants Project CAD Current Account Deficit NPLs Non-Performing Loans CBT Central Bank of Tunisia OdC Office des Céréales CPI Consumer Price Index OECD Organisation for Economic Co-operation EFF Extended Fund Facility and Development EUR Euro OTE Office for Tunisians Abroad FDI Foreign Direct Investment SOEs State-Owned Enterprises GDP Gross Domestic Product TEM Tunisia Economic Monitor HIMS Households’ International Migration TND Tunisian Dinar Surveys UGTT Union Générale Tunisienne du Travail ILO International Labour Organization UN United Nations IMF International Monetary Fund UNDESA United Nations Department of Economic INS Institut National de la Statistique (Tunisia) and Social Affairs IOM International Organization for Migration UNHCR United Nations High Commissioner for MENA Middle East and North Africa Refugees MFPE Ministère de la Formation professionnelle USD United States Dollar et de l’Emploi VAT Value Added Tax vii EXECUTIVE SUMMARY The drought slowed down an already international energy and food prices. The energy def- limited economic recovery in the icit widened due to a drop in domestic production in first half of 2023 spite of more favorable prices, continuing to account for the majority of the merchandise trade deficit. The nar- The sixth consecutive year of below-average rainfall rowing trade deficit along with the rebounding of tour- compromised Tunisia’s agricultural production and ism receipts (+47 percent year-on-year as of the end of slowed down further an already limited economic recov- August 2023) and the stable performance of remittances ery. The Tunisian economy expanded in real terms by (see part B) brought down the current account deficit 1.2 percent in the first half of 2023, half the rate of 2022, (CAD) in the first half of the year. The lower CAD eases and almost a quarter of the 2021 rate. The drought has the pressure on the external financing needs, which compounded a difficult recovery, marred by uncertain however remain significant in light of the forthcoming external financing and continued regulatory barriers to heavy external debt repayment schedule: TD 4.8 billion, growth, which have not been addressed by economic or 3 percent of GDP in the last two quarters of 2023. In reforms. Tunisia exhibits a very modest economic the absence of private sources of capital, Tunisia con- recovery in comparison with other countries from the tinues to depend on sovereign lending to finance its Middle East and North African region, with its GDP per external needs amidst uncertain financing conditions. capita still 4.7 percent below the pre-pandemic level. The narrowing of the CAD along with recent additional With limited economic growth, the unemployment rate external financing, notably from Saudi Arabia, helped increased slightly by the second quarter of 2023, stabi- to ease the pressure on foreign exchange reserves and lizing at the pre-Covid level, while the labor force partic- the Dinar, providing some buffer on the external side. ipation rate remained below pre-Covid. Shortages of basic products have Favorable terms of trade and the continued, partly fueled by the tourism recovery improved the system of subsidies and the drop in current account deficit but external agricultural production, which have financing needs remain significant also increased the debt of state- while external financing has declined owned marketing boards Tunisia’s merchandise trade deficit declined by 39 per- As external financing conditions remain tight, imports cent in the first 8 months of 2023 to TD 12.2 billion have continued to be compressed. That is particularly (7.5 percent of 2023 GDP), boosted by more favorable the case for highly indebted state-owned trade boards, ix which hold the monopoly over the import and distribu- tained wage bill growth and reversing the declining tion of specific products. For example, as the drought trend of public investment by re-orienting subsidies reduced Tunisia’s hard wheat harvest by two-third in continue to be key for economic growth. Public debt early 2023 compared to previous year, the Office des stood at 79.8 percent of GDP in 2022 and the debt Céréales had difficulties to step up its imports to com- servicing cost reached 3 percent of GDP in the first pensate for the shortfall. The quantity of hard wheat half of 2023. Given the limited access to international supplied to the market dropped by 18 percent in the financing, the government has increasingly relied on first half of 2023 compared to previous year, contribut- domestic borrowing which is crowding out credit to ing to the shortages of cereal products. The system of the private sector. price control that regulates the markets of wheat and other basic products such as sugar, milk and vegeta- ble oil is a key driver of the increasing indebtedness Growth prospects are highly of the state-owned marketing boards and shortages. dependent on the evolution of the drought and on external financing conditions Inflation moderated slightly but it remains high—especially for food The World Bank forecasts a 1.2 percent GDP growth in 2023—a significant slowdown compared to 2021– Inflation started to moderate since the peak of Feb- 22—with a slight uptick to 3.0 percent in 2024. The ruary 2023 (10.4 percent). It declined to 9.0 percent 2024 growth forecast is subject to significant down- in September on the back of lower global prices and side risks related to the evolution of the drought, and weak domestic demand. However, inflation is still high, the pace of structural reforms planned by the govern- particularly for food (13.9 percent), as the drought ment, and financing conditions. Tunisia’s twin deficit is and the import compression have reduced the sup- expected to moderate on the back of more favorable ply in domestic food markets. Inflation also remains commodity prices and some compression of expen- well above the interest rate, even though the latter has ditures. However, the financing of the deficits will remained stable in 2023. Maintaining a strong and require a significant scale-up of the external financing independent Central Bank will be a central pillar in in the face of the heavy debt reimbursement sched- the pursuit of price stability. ule. If the pace of reforms and the level of financing remain sufficient, we project GDP growth to remain at 3 percent in 2025–26 along with some stabilization of The moderate public wage bill the macro and fiscal imbalances. That would entail a growth contained the budget deficit slow convergence towards the long-run growth path, during the first half of 2023, as its from which the economy deviated during the Covid-19 financing continues to crowd out crisis, by mid-2030s. private sector credit The slowdown in growth dragged the performance Emigration—including through of indirect taxes, particularly VAT and customs. As irregular channels—has become an a result, the increase in tax revenues in the first half increasingly important strategy for of 2023 has been more modest (+8.3 percent) than Tunisians to cope with the difficult expected in the 2023 Budget Law (+15.3 percent), economic and social situation in the and lower than the inflation rate (so tax revenues con- country tracted in real terms). However, the more contained public wage bill growth and weak public investment Emigration is becoming an increasingly important allowed the balancing of the budget in the first half of strategy for Tunisians to cope with the challenging 2023, in line with the year before. Maintaining a con- economic and social situation in the country. Tunisia’s x TUNISIA ECONOMIC MONITOR – MIGRATION AMID A CHALLENGING ECONOMIC CONTEXT emigration flows increased significantly over the last third of irregular migrants to Italy via the Central Med- two decades, and have followed more irregular path- iterranean route over the period. Of these, the large ways since 2019. With more than 54,000 arrivals (19 majority were coming from sub-Saharan Africa. The percent), Tunisians represent the main nationality of rise in irregular departures has led to an uptick in inci- irregular migrants having reached Italy via the Cen- dents and casualties off the Tunisian coasts. tral Mediterranean Route between January 2019 and June 2023. For many Tunisians, emigration harbors a high attractiveness given the higher income possibili- Tunisia can work (also with partner ties in Europe. However, such potential income gains countries) to maximize the benefits are considerably lower when migrants are undocu- of migration mented. More than 200,000 Tunisian emigrants have Migration will likely become increasingly important also come back to Tunisia bringing back skills and for Tunisia in terms of both inflows and outflows, capital to invest having resided abroad on average for given the demographic transition in both Tunisia and about 11 years. Nonetheless, fewer return than those Europe. As such Tunisia can work (also with part- who emigrate, particularly among the high-skilled. ner countries) to maximize the benefits of migra- Just like Tunisians emigrate in search of better tion. As a country of mainly emigration, Tunisia could living conditions, Tunisia is also a destination country help strengthen the match of its emigrants with the for about 60,000 migrants coming from abroad as of demand abroad, including through enhanced coop- 2020, based on UNDESA estimates and the Tunisia- eration with destination countries. Such coopera- HIMS survey. Their number increased at a slower tion should include focusing international assistance pace than emigration in recent years. Today, they towards development objectives in Tunisia. Based on make up around 0.5 percent of the population—a very available evidence, increasing household incomes low number indeed between 20 and 25 times lower will contribute to reducing the propensity to consider than in close European countries including Italy and emigrating through irregular channels. As its impor- France and neighboring Libya. However, for migrants, tance as a destination country (hence migrants who it is challenging to maintain their legal status in Tuni- want to settle in Tunisia) is likely to increase, Tunisia sia, as obtaining a residence or work permit is cum- can also enhance the economic benefits from immi- bersome, making them more vulnerable and less able grants by facilitating migrants’ regular status and to contribute to the Tunisian economy. streamlining the recognition of their qualifications, Since the end of 2022, Tunisia has also become which has been identified as one of the key aspects an important transit country for irregular migration to for the successful implementation of bilateral mobility Europe. In the first eight months of 2023, 73,829 peo- agreements involving skill partnerships. ple arrived in Italy by sea from Tunisia. That is around 44 percent of all irregular migrants to Europe and two xi RÉSUMÉ ANALYTIQUE La sécheresse a ralenti une reprise Les termes de l’échange favorables économique déjà limitée au premier et la reprise du tourisme ont semestre 2023 amélioré le déficit du compte courant, mais les besoins de Pour la sixième année consécutive, le taux de pré- financement extérieur restent cipitations est inférieur à la moyenne. Ce qui a com- importants tandis que le financement promis la production agricole tunisienne et a ralenti extérieur a diminué encore une fois une reprise économique déjà limitée. L’économie tunisienne a connu une croissance en Le déficit commercial de la Tunisie a diminué de 39 termes réels de 1,2 pour cent au premier semestre pour cents au cours des 8 premiers mois de 2023 2023, soit la moitié du taux de 2022 et près d’un pour atteindre 12,2 milliards de DT (7,5 pour cent du quart du taux de 2021. La sécheresse a aggravé une PIB de 2023), grâce à des prix internationaux plus reprise difficile, marquée par un financement exté- favorables de l’énergie et des produits alimentaires. rieur incertain et des obstacles réglementaires à la Le déficit énergétique s’est creusé en raison d’une croissance persistants. Ces obstacles n’ont pas été baisse de la production intérieure et malgré des prix surmontées par les réformes économiques. La Tuni- internationaux plus favorables, continuant ainsi, de sie enregistre une reprise économique très modeste représenter la majeure partie du déficit commercial. en comparaison avec les pays de la région du Moyen- La réduction du déficit commercial conjuguée au Orient et de l’Afrique du Nord, avec un PIB par habi- rebond des recettes touristiques (+47 pour cent sur tant toujours inférieur de 4,7 pour cent par rapport un an à fin août 2023) et à la stabilité des envois de à son niveau d’avant la pandémie. Avec une crois- fonds (voir partie B), ont réduit le déficit des opéra- sance économique limitée, le taux de chômage a tions courantes (DOC) au premier semestre 2023. La légèrement augmenté au deuxième trimestre 2023, baisse du DOC a atténué la pression sur les besoins se stabilisant au niveau d’avant Covid. Tandis que de financement extérieur, qui restent cependant le taux d’activité est resté inférieur à celui d’avant importants au vu du lourd échéancier à venir de rem- Covid. boursement de la dette extérieure : 4,8 milliards de xiii DT, soit 3pour cent du PIB au cours des deux der- L’inflation a diminué mais elle niers trimestres de 2023. En l’absence de sources reste élevée — notamment pour les privées de capitaux, la Tunisie continue de dépendre produits alimentaires des prêts souverains pour financer ses besoins exté- rieurs dans un contexte de conditions de financement L’inflation a commencé à diminuer depuis le pic de incertaines. La diminution du déficit courant ainsi que février 2023 (10,4 pour cent). Elle a atteint 9 pour cent les récents financements extérieurs supplémentaires, en septembre grâce à la baisse des prix mondiaux et la notamment de la part de l’Arabie Saoudite, ont contri- faiblesse de la demande intérieure. Cependant, l’infla- bué à atténuer la pression sur les réserves de change tion reste élevée, en particulier dans le secteur alimen- et sur le dinar, fournissant ainsi une certaine marge de taire (13,9 pour cent), car la sécheresse et la compres- manœuvre pour préserver les équilibres extérieurs. sion des importations ont réduit l’offre sur les marchés alimentaires intérieurs. L’inflation demeure également bien supérieure au taux d’intérêt, même si ce dernier Les pénuries de produits de base se a été maintenu constant en 2023. Le maintien d’une sont poursuivies, en partie générées banque centrale forte et indépendante constituera un par le système de subventions pilier principal dans la quête de la stabilité des prix. et la baisse de la production agricole, qui ont également accru la dette des entreprises publiques La croissance modérée de la masse commercialisant les biens importés salariale publique a contenu le subventionnés déficit budgétaire au cours du premier semestre 2023, alors que Comme les conditions de financement extérieur son financement continue d’évincer restent strictes, les importations ont continué à se le crédit du secteur privé contracter. C’est particulièrement le cas des produits commercialisés par des entreprises publiques très Le ralentissement de la croissance a réduit les per- endettées, qui détiennent le monopole de l’importa- formances des impôts indirects, notamment la TVA et tion et de la distribution de produits spécifiques. Par les droits de douanes. En conséquence, l’augmenta- exemple, comme la sécheresse a réduit de deux tiers tion des recettes fiscales au premier semestre 2023 a la récolte de blé dur de la Tunisie début 2023 par rap- été plus modeste (+8,3 pour cent) que les prévisions port à l’année précédente, l’Office des Céréales a eu de la loi de finances 2023 (+15,3 pour cent) et infé- des difficultés à augmenter ses importations pour rieure au taux d’inflation (les recettes fiscales se sont compenser le déficit. La quantité de blé dur four- donc contractées en termes réels). Toutefois, la crois- nie au marché a chuté de 18 pour cent au premier sance plus contenue de la masse salariale publique semestre 2023 par rapport à l’année précédente, et la faiblesse des investissements publics ont per- contribuant ainsi aux pénuries de produits céréaliers. mis d’équilibrer le budget au premier semestre 2023, Le système de contrôle des prix qui régule les mar- comme l’année précédente. Maintenir une croissance chés du blé et d’autres produits de base tels que le modérée de la masse salariale et inverser la tendance sucre, le lait et l’huile végétale est un facteur clé de à la baisse des investissements publics en réorientant l’endettement croissant des entreprises publiques qui les subventions demeurent essentiels à la croissance ont le monopole d’importation et de commercialisa- économique. La dette publique s’élevait à 79,8 pour tion des produits importés ainsi que des pénuries qui cent du PIB en 2022 et le service de la dette a atteint 3 en découlent. pour cent du PIB au premier semestre 2023. Compte xiv TUNISIA ECONOMIC MONITOR – MIGRATION AMID A CHALLENGING ECONOMIC CONTEXT tenu de l’accès limité au financement international, le augmenté au cours des deux dernières décennies et gouvernement s’est de plus en plus appuyé sur l’em- ont suivi des voies plus irrégulières depuis 2019. Avec prunt intérieur, ce qui évince le crédit au secteur privé. plus de 54 000 arrivées (19 pour cent), les Tunisiens représentent la principale nationalité des migrants irréguliers ayant atteint l’Italie via la route de la Médi- Les perspectives de croissance terranée centrale entre janvier 2019 et juin 2023. Pour dépendent fortement de l’évolution beaucoup de tunisiens l’émigration est très attrayante de la sécheresse et des conditions de en raison des possibilités de revenus plus élevés financement extérieur en Europe. Toutefois, ces gains de revenus poten- tiels sont considérablement plus faibles lorsque les La Banque Mondiale prévoit une croissance du PIB migrants sont sans papiers. Plus de 200 000 migrants de 1,2 pour cent en 2023 — un ralentissement signi- sont également revenus en Tunisie avec des compé- ficatif par rapport à 2021–2022 — avec une légère tences et des capitaux à investir, ayant résidé à l’étran- hausse à 3,0 pour cent en 2024. Les prévisions ger en moyenne 11 années. Néanmoins, ils sont de croissance pour 2024 sont soumises à d’im- moins nombreux à revenir que les travailleurs émi- portants risques à la baisse liés à l’évolution de la grants hautement qualifiés.. sécheresse ainsi qu’au rythme des réformes struc- Tout comme les Tunisiens émigrent à la turelles planifiées par le gouvernement et aux condi- recherche de meilleures conditions de vie, la Tuni- tions de financement. Les déficits jumeaux de la sie est également un pays de destination pour envi- Tunisie devraient se modérer grâce à des prix plus ron 60 000 migrants venant de l’étranger en 2020, favorables des matières premières et à une certaine selon les estimations de l’UNDESA et l’enquête Tuni- compression des dépenses. Cependant, le finan- sie-HIMS. Leur nombre a augmenté à un rythme plus cement des déficits nécessitera une augmenta- lent que celui de l’émigration ces dernières années. tion significative du financement extérieur face au Aujourd’hui, ils représentent environ 0,5 pour cent de lourd calendrier de remboursement de la dette. Si la population – un chiffre très faible, entre 20 et 25 fois le rythme des réformes s’accélère et le niveau de inférieur à celui des pays européens voisins, notam- financement reste suffisant, nous prévoyons que la ment l’Italie, la France et la Libye voisine. Cependant, croissance du PIB se maintiendra à 3 pour cent en pour les migrants, il est difficile de conserver leur sta- 2025–2026, accompagnée d’une certaine stabilisa- tut légal en Tunisie, car les procédures d’obtention tion des déséquilibres macroéconomiques et bud- d’un permis de séjour ou de travail sont lourdes, ce gétaires. Cela impliquerait une lente convergence qui les rend plus vulnérables et moins capables de vers le milieu des années 30s vers la trajectoire de contribuer à l’économie tunisienne. croissance à long terme, dont l’économie s’est écar- Depuis fin 2022, la Tunisie est également deve- tée depuis la crise du Covid-19. nue un important pays de transit pour la migration irré- gulière vers l’Europe. Au cours des huit premiers mois L’émigration — y compris par des de 2023, 73 829 personnes sont arrivées en Italie voies irrégulières — est devenue une par voie maritime depuis la Tunisie. Cela représente stratégie de plus en plus importante environ 44 pour cent de tous les migrants irréguliers pour faire face à la situation vers l’Europe et deux tiers des migrants irréguliers économique et sociale difficile du pays vers l’Italie via la route de la Méditerranée centrale au cours de la période. Parmi eux, la grande majorité L’émigration devient une stratégie de plus en plus venait d’Afrique subsaharienne. La multiplication des importante pour les Tunisiens pour faire face à la départs irréguliers a entraîné une recrudescence des situation économique et sociale délicate du pays. Les incidents et une augmentation du nombre des vic- flux d’émigration de la Tunisie ont considérablement times au large des côtes tunisiennes. Résumé Analytique xv La Tunisie peut travailler — coopération devrait inclure la concentration de l’aide également avec les pays partenaires internationale sur les objectifs de développement en — pour maximiser les bénéfices de la Tunisie. D’après les données disponibles, l’augmenta- migration tion des revenus des ménages contribuera à réduire la propension à envisager d’émigrer par des voies La migration deviendra probablement de plus en plus irrégulières. Comme son importance en tant que pays importante pour la Tunisie, tant en termes d’entrées de destination (et donc de migrants souhaitant s’ins- que de sorties, compte tenu de la transition démogra- taller en Tunisie) est susceptible de croître, la Tuni- phique en Tunisie et en Europe. Ainsi, la Tunisie peut sie peut également accroître les avantages écono- travailler (également avec les pays partenaires) pour miques des immigrants en facilitant le statut régulier maximiser les bénéfices de la migration. En tant que des migrants et en rationalisant la reconnaissance de pays principalement d’émigrant, la Tunisie pourrait leurs qualifications, ce qui a été identifié comme l’un contribuer à renforcer l’adéquation de ses émigrés à des aspects clés de la mise en œuvre réussie d’ac- la demande étrangère, notamment par une coopéra- cords de mobilité bilatéraux impliquant des partena- tion renforcée avec les pays de destination. Une telle riats de compétences. xvi TUNISIA ECONOMIC MONITOR – MIGRATION AMID A CHALLENGING ECONOMIC CONTEXT ‫ملخص تنفيذي‬ ‫عائدات السياحة (‪ +47‬باملائة عىل أساس سنوي حتى نهاية أغسطس‬ ‫أدى الجفاف إىل تباطؤ التعايف االقتصادي املحدود يف‬ ‫‪ )2023‬واألداء املستقر للتحويالت املالية إىل خفض عجز الحساب الجاري‬ ‫األصل يف النصف األول من عام ‪2023‬‬ ‫يف النصف األول من العام‪ .‬وقد أدى انخفاض عجز الحساب الجاري إىل‬ ‫التخفيف من الضغط عىل احتياجات التمويل الخارجي‪ ،‬والتي تظل كبرية‬ ‫أرضت ندرة نزول األمطار التي انخفضت اىل مستوى دون املتوسط‬ ‫مع ذلك يف ضوء جدول سداد الديون الخارجية الثقيلة املقبلة‪ 4.8 :‬مليار‬ ‫للسنة السادسة عىل التوايل باإلنتاج الفالحي يف تونس وأدت إىل تباطؤ‬ ‫دينار تونيس‪ ،‬أو ‪ 3‬يف املائة من الناتج الداخيل الخام خالل النصف األخري‬ ‫االنتعاش االقتصادي املحدود يف األصل‪ .‬حقق االقتصاد التونيس منوا‬ ‫من عام ‪ .2023‬يف غياب مصادر التمويل من األسواق املالية ‪ ،‬تواصل‬ ‫بنسبة ‪ 1.2‬باملئة يف النصف األول من ‪ ،2023‬أي نصف منو ‪ ،2022‬وربع‬ ‫تونس االعتامد عىل اإلقرتاض السيادي لتمويل احتياجاتها الخارجية وسط‬ ‫منو ‪ 2021‬تقريبا‪ .‬وقد أدى الجفاف إىل تفاقم عملية التعايف الصعبة‪،‬‬ ‫ظروف متويل غري مؤكدة‪ .‬وساعد تقليص عجز الحساب الجاري إىل جانب‬ ‫التي شابها عدم اليقني عىل مستوى التمويل الخارجي واستمرار الحواجز‬ ‫التمويل الخارجي اإلضايف األخري‪ ،‬ال سيام من اململكة العربية السعودية‪،‬‬ ‫التنظيمية و القانونية أمام النمو‪ ،‬والتي مل تعالجها اإلصالحات االقتصادية‬ ‫عىل تخفيف الضغط عىل احتياطيات العملة األجنبية والدينار‪ ،‬وبالتايل‬ ‫حتى اآلن‪ .‬تظهر تونس انتعاشً ا اقتصاديًا متواض ً‬ ‫عا مقارنة بالدول األخرى‬ ‫توفري بعض املساحة للحفاظ عىل التوازنات الخارجية‪.‬‬ ‫يف منطقة الرشق األوسط وشامل إفريقيا‪ ،‬حيث ال يزال نصيب الفرد من‬ ‫الناتج الداخيل الخام أقل بنسبة ‪ 4.7‬يف املائة من مستوى ما قبل الوباء‪.‬‬ ‫ومع النمو االقتصادي املحدود‪ ،‬ارتفع معدل البطالة بشكل طفيف‬ ‫وأدت أسعار التبادل التجاري املواتية وانتعاش‬ ‫بحلول الربع الثاين من عام ‪ ،2023‬واستقر عند مستوى ما قبل كوفيد‪،‬‬ ‫السياحة إىل تحسني عجز الحساب الجاري‪ ،‬لكن‬ ‫يف حني ظل معدل املشاركة يف القوى العاملة أقل من مستواه قبل‬ ‫احتياجات التمويل الخارجي ال تزال كبرية يف ظل‬ ‫جائحة كوفيد‪.‬‬ ‫انخفاض مستوى التمويل الخارجي‬ ‫ومع استمرار ضيق رشوط التمويل الخارجي‪ ،‬استمرت الضغوط عىل‬ ‫وأدت أسعار التبادل التجاري املواتية وانتعاش‬ ‫الواردات‪ .‬وهذا هو الحال بشكل خاص بالنسبة للمؤسسات العمومية‬ ‫السياحة إىل تحسني عجز الحساب الجاري‪ ،‬لكن‬ ‫واملثقلة بالديون‪ ،‬والتي تحتكر استرياد وتوزيع منتجات معينة‪ .‬عىل‬ ‫احتياجات التمويل الخارجي ال تزال كبرية يف ظل‬ ‫را ألن الجفاف أدى إىل انخفاض محصول القمح الصلب‬ ‫سبيل املثال‪ ،‬نظ ً‬ ‫انخفاض مستوى التمويل الخارجي‬ ‫يف تونس مبقدار الثلثني يف أوائل عام ‪ 2023‬مقارنة بالعام السابق‪ ،‬واجه‬ ‫ديوان الحبوب صعوبات يف زيادة وارداته لتعويض النقص‪ .‬وانخفضت‬ ‫انخفض العجز التجاري لتونس بنسبة ‪ 39‬باملائة يف األشهر الثامنية األوىل‬ ‫كمية القمح الصلب املتوفرة يف السوق بنسبة ‪ 18‬باملائة يف النصف األول‬ ‫من عام ‪ 2023‬إىل ‪ 12.2‬مليار دينار تونيس (‪ 7.5‬يف املائة من الناتج الداخيل‬ ‫من عام ‪ 2023‬مقارنة بالعام السابق‪ ،‬مام ساهم يف نقص بعض منتجات‬ ‫الخام لعام ‪ ،)2023‬مدعوما بأسعار الطاقة والغذاء الدولية التي أخذت‬ ‫الحبوب‪ .‬يعد نظام مراقبة األسعار الذي ينظم أسواق القمح واملنتجات‬ ‫منحى تنازيل وهو أكرث مالءمة لالقتصاد التونيس ‪ .‬واتسع العجز يف الطاقة‬ ‫األساسية األخرى مثل السكر والحليب والزيت النبايت عامال أساسيا‬ ‫بسبب انخفاض اإلنتاج املحيل عىل الرغم من تحسن األسعار‪ ،‬وبالتايل ظل‬ ‫لنقصها ولتزايد مديونية املؤسسات العمومية‪.‬‬ ‫ميثل غالبية العجز التجاري‪ .‬أدى تقليص العجز التجاري إىل جانب انتعاش‬ ‫‪xvii‬‬ ‫الكلية واملالية العامة‪ .‬هذا من شأنه أن يؤدي إىل تقارب بطي نحو مسار‬ ‫وقد سجل تراجع طفيف يف نسبة التضخم ولكنه ظل‬ ‫النمو طويل األمد‪ ،‬الذي انحرف عنه االقتصاد خالل أزمة كوفيد ‪،19 -‬‬ ‫مرتفعاً ‪ -‬وخاصة بالنسبة للمواد الغذائية‬ ‫بحلول منتصف ثالثينيات القرن الحايل‪.‬‬ ‫بدأ التضخم يف االنخفاض منذ الذروة التي بلغها يف فرباير ‪.)10.4%( 2023‬‬ ‫وانخفض إىل ‪ 9.0‬باملائة يف سبتمرب‪/‬أيلول عىل خلفية انخفاض األسعار‬ ‫أصبحت الهجرة ‪ -‬مبا يف ذلك عرب القنوات غري النظامية ‪-‬‬ ‫العاملية وضعف الطلب املحيل‪ .‬ومع ذلك‪ ،‬ال يزال التضخم مرتفعا‪ ،‬خاصة‬ ‫اسرتاتيجية ذات أهمية متزايدة لدى التونسيني للتعامل‬ ‫بالنسبة لألغذية (‪ 13.9‬يف املائة)‪ ،‬حيث أدى الجفاف وضغط الواردات إىل‬ ‫مع الوضع االقتصادي واالجتامعي الصعب يف البالد‬ ‫انخفاض العرض يف أسواق املواد الغذائية املحلية‪ .‬وال يزال التضخم أيضا‬ ‫أصبحت الهجرة اسرتاتيجية ذات أهمية متزايدة لدى التونسيني للتعامل‬ ‫أعىل بكثري من سعر الفائدة‪ ،‬عىل الرغم من أن هذا األخري ظل مستقرا يف‬ ‫مع الوضع االقتصادي واالجتامعي الصعب يف البالد‪ .‬زادت تدفقات الهجرة‬ ‫عام ‪ .2023‬وسيكون الحفاظ عىل بنك مركزي قوي ومستقل ركيزة أساسية‬ ‫التونسية بشكل كبري خالل العقدين املاضيني‪ ،‬واتبعت املزيد من املسارات‬ ‫يف السعي لتحقيق استقرار األسعار‪.‬‬ ‫غري النظامية منذ عام ‪ .2019‬ومع وصول أكرث من ‪ 54000‬شخص (‪19‬‬ ‫باملائة)‪ ،‬ميثل التونسيون الجنسية الرئيسية للمهاجرين غري نظاميني الذين‬ ‫أدى التطور املعتدل يف نسق ارتفاع األجور يف القطاع‬ ‫وصلوا إىل إيطاليا عرب طريق وسط البحر األبيض املتوسط بني يناير ‪2019‬‬ ‫العام إىل احتواء عجز ميزانية الدولة خالل النصف‬ ‫ويونيو ‪ .2023‬بالنسبة للعديد من التونسيني‪ ،‬تتمتع الهجرة بجاذبية عالية‬ ‫األول من عام ‪ ،2023‬حيث يواصل متويلها منافسة‬ ‫نظرا الحتامالت الدخل املرتفعة يف أوروبا‪ .‬ومع ذلك‪ ،‬فإن مكاسب الدخل‬ ‫متويل القطاع الخاص‬ ‫املحتملة هذه تكون أقل بكثري عندما يكون املهاجرون بدون بطاقات‬ ‫هوية ‪ .‬أكرث من ‪ 200.000‬تونيس عادو إىل تونس حاملني معهم املهارات‬ ‫وأدى تباطؤ النمو إىل انخفاض أداء الرضائب غري املبارشة‪ ،‬وخاصة‬ ‫ما يف املتوسط‪.‬‬‫ورأس املال لالستثامر بعد أن أقاموا يف الخارج ملدة ‪ 11‬عا ً‬ ‫الرضيبة عىل القيمة املضافة و الرسوم الجمركية‪ .‬و لذلك‪ ،‬كانت الزيادة‬ ‫ومع ذلك‪ ،‬فإن العائدين أقل من أولئك الذين يهاجرون‪ ،‬وخاصة بني ذوي‬ ‫يف اإليرادات الرضيبية يف النصف األول من عام ‪ 2023‬أقل (‪ +8.3‬باملائة)‬ ‫املهارات العالية‪.‬‬ ‫مام كان متوقعا يف قانون املالية لعام ‪ +15.3( 2023‬يف املائة)‪ ،‬وأقل من‬ ‫مثلام يهاجر التونسيون بحثًا عن ظروف معيشية أفضل‪ ،‬تعد‬ ‫معدل التضخم (وبالتايل تقلصت عائدات الرضائب بالقيمة الحقيقية)‪.‬‬ ‫را‬ ‫تونس أيضً ا بلد مقصد لحوايل ‪ 60‬ألف مهاجر قادم من الخارج اعتبا ً‬ ‫ومع ذلك‪ ،‬فإن زيادة احتواء نسق ارتفاع األجور يف القطاع العام وضعف‬ ‫ء عىل تقديرات إدارة الشؤون االقتصادية واالجتامعية‬ ‫من عام ‪ ،2020‬بنا ً‬ ‫االستثامر العام سمحا بتحقيق التوازن يف ميزانية الدولة يف النصف األول‬ ‫ومسح تونس‪ .HIMS-‬وقد زادت أعدادهم بوترية أبطأ من الهجرة إىل‬ ‫من عام ‪ ،2023‬كام كان الحال يف العام املايض‪ .‬ويظل الحفاظ عىل منو‬ ‫تونس يف السنوات األخرية‪ .‬واليوم‪ ،‬يشكلون حوايل ‪ 0.5%‬من السكان‪،‬‬ ‫معتدل يف كتلة األجور وعكس االتجاه املنحدر يف االستثامر العمومي من‬ ‫وهو رقم منخفض للغاية ‪ -‬ما بني ‪ 20‬إىل ‪ 25‬مرة أقل مام هو عليه يف‬ ‫خالل إعادة توجيه الدعم رضوريا للنمو االقتصادي‪ .‬بلغ الدين العمومي‬ ‫الدول األوروبية القريبة‪ -‬مبا يف ذلك إيطاليا وفرنسا ‪ -‬وليبيا املجاورة‪ .‬مع‬ ‫‪ 79.8%‬من الناتج الداخيل الخام يف عام ‪ ،2022‬ووصلت تكلفة خدمة‬ ‫العلم ان ‪ ،‬بالنسبة للمهاجرين‪ ،‬من الصعب الحفاظ عىل وضعهم القانوين‬ ‫الدين إىل ‪ 3%‬من الناتج الداخيل الخام يف النصف األول من عام ‪.2023‬‬ ‫يف تونس‪ ،‬ألن الحصول عىل ترصيح إقامة أو عمل مرهق وصعب‪ ،‬مام‬ ‫را ملحدودية التوصل إىل التمويل الدويل‪ ،‬اعتمدت الحكومة بشكل‬ ‫ونظ ً‬ ‫يجعلهم أكرث عرضة للخطر وأقل قدرة عىل املساهمة يف االقتصاد التونيس‪.‬‬ ‫متزايد عىل االقرتاض املحيل الذي ينافس متويل القطاع الخاص‪.‬‬ ‫ومنذ نهاية عام ‪ ،2022‬أصبحت تونس أيضً ا دولة عبور مهمة‬ ‫للهجرة غري الرشعية إىل أوروبا‪ .‬يف األشهر الثامنية األوىل من عام ‪،2023‬‬ ‫شخصا إىل إيطاليا عن طريق البحر من تونس‪ .‬وميثل هذا‬ ‫وصل ‪ً 73829‬‬ ‫تعتمد آفاق النمو بشكل كبري عىل تطور العوامل‬ ‫حوايل ‪ 44‬باملائة من جميع املهاجرين غري نظاميني إىل أوروبا وثلثي‬ ‫املناخية وعىل ظروف التمويل الخارجي‬ ‫املهاجرين غري نظاميني إىل إيطاليا عرب طريق وسط البحر األبيض املتوسط‬ ‫ويتوقع البنك الدويل منو الناتج الداخيل الخام بنسبة ‪ 1.2%‬يف عام ‪2023‬‬ ‫خالل هذه الفرتة‪ .‬وكانت الغالبية العظمى من هؤالء قادمني من أفريقيا‬ ‫‪ -‬وهو تباطؤ كبري مقارنة بالفرتة ‪ - 2022-2021‬مع ارتفاع طفيف إىل‬ ‫جنوب الصحراء الكربى‪ .‬وأدى ارتفاع حاالت املغادرة غري النظامية إىل‬ ‫‪ 3.0%‬يف عام ‪ .2024‬وتخضع توقعات النمو لعام ‪ 2024‬ملخاطر تتعلق‬ ‫ارتفاع وترية الحوادث واإلصابات قبالة السواحل التونسية‪.‬‬ ‫بتطور العوامل املناخية )الجفاف(‪ ،‬وترية اإلصالحات الهيكلية التي تخطط‬ ‫لها الحكومة‪ ،‬ورشوط التمويل ‪.‬ومن املتوقع أن يرتاجع العجز املزدوج يف‬ ‫ميكن لتونس أن تعمل (أيضً ا مع الدول الرشيكة) عىل‬ ‫تونس بفضل تحسن أسعار املواد األساسية وبعض الضغط عىل النفقات‪.‬‬ ‫تحقيق أقىص قدر من فوائد الهجرة‬ ‫ومع ذلك‪ ،‬فإن متويل العجز سيتطلب زيادة كبرية يف التمويل الخارجي‬ ‫ملواجهة جدول سداد الديون الثقيل ‪.‬ويف حالة ظلت وترية اإلصالحات‬ ‫من املرجح أن تصبح الهجرة ذات أهمية متزايدة بالنسبة لتونس من حيث‬ ‫ومستوى التمويل كافيني‪ ،‬فإننا نتوقع أن يظل منو الناتج املحيل اإلجاميل‬ ‫التدفقات الداخلة والخارجة‪ ،‬نظرا للتحول الدميوغرايف يف كل من تونس‬ ‫عند ‪ 3%‬يف الفرتة ‪ 2026-2025‬إىل جانب بعض االستقرار يف االختالالت‬ ‫‪xviii‬‬ ‫‪TUNISIA ECONOMIC MONITOR – MIGRATION AMID A CHALLENGING ECONOMIC CONTEXT‬‬ ‫الحد من امليل إىل التفكري يف الهجرة عرب القنوات غري النظامية‪.‬ومع احتامل‬ ‫وأوروبا‪ .‬وعىل هذا النحو‪ ،‬ميكن لتونس أن تعمل (أيضً ا مع الدول الرشيكة)‬ ‫زيادة أهميتها كبلد مقصد (وبالتايل املهاجرين الذين يرغبون يف االستقرار‬ ‫دا للمهاجرين‬ ‫عىل تحقيق أقىص قدر من فوائد الهجرة‪ .‬وباعتبارها بل ً‬ ‫يف تونس)‪ ،‬ميكن لتونس أيضً ا تعزيز الفوائد االقتصادية للمهاجرين من‬ ‫بشكل رئييس‪ ،‬ميكن لتونس أن تساهم يف تعزيز كفاية مهاجريها للطلب‬ ‫خالل تسهيل الوضع النظامي للمهاجرين وتبسيط االعرتاف مبؤهالتهم‪،‬‬ ‫الخارجي‪ ،‬ال سيام من خالل تعزيز التعاون مع بلدان املقصد وينبغي أن‬ ‫وهو ما تم تحديده عىل أنه أحد الجوانب الرئيسية للتنفيذ الناجح‬ ‫يشمل هذا التعاون تركيز املساعدة الدولية عىل تحقيق األهداف اإلمنائية‬ ‫التفاقيات التنقل الثنائية التي تنطوي عىل رشاكات يف املهارات‪.‬‬ ‫يف تونس‪ .‬واستنادا إىل البيانات املتاحة‪ ،‬فإن زيادة دخل األرس ستسهم يف‬ ‫يذيفنت صخلم‬ ‫‪xix‬‬ A PART RECENT ECONOMIC DEVELOPMENTS The moderate economic recovery 1.  Tunisia’s real GDP remains below the pre- is slowing down further due to pandemic level, with a very moderate economic drought conditions, uncertain recovery in comparison with other countries from financing conditions and the slow the Middle East and North African (MENA) region. pace of reforms The economic slowdown has been particularly signif- icant in the second quarter of 2023 as the drought’s Tunisia’s modest economic recovery slowed down impact worsened. Real GDP dropped by 1.3 percent further in the first half of 2023, weighed down by relative to the first quarter, the largest quarter-on-quar- a severe drought, uncertain financing conditions ter drop since the pandemic (figure 1), It was still lower and the pace of Government planned reforms. The than Q2 2019 (by 2.3 percent) and even Q2 2018 (by sixth consecutive year of below-average rainfall com- 0.6 percent). This performance has been comparatively promised the country’s agricultural production, with modest vis-à-vis Tunisia’s peers, which exhibited lower sectoral value added declining by 9 percent in real declines during the pandemic and more sustained terms in the first half of 2023 relatively to the same recoveries (figure 2). By the first quarter 2023, all of period in 2022. This negative shock has compounded Tunisia’s peers had real GDP above pre-pandemic level. a difficult recovery, marred by uncertain external financ- Agriculture was the main driver of the 2023 ing and continued regulatory barriers to growth, such economic slowdown, as low and variable rainfall as authorizations to access many sectors, strict and exposed the deficiencies of a sector that needs discretionary controls on foreign exchange and reg- reforms to adapt to climate change. The lack of rain- ulatory capture of incumbents, which have not been fall during the first 5 months of 2023 aggravated the dry addressed by reforms (see the 2022 Winter issue of conditions prevailing in Tunisia over the past 6 years, the Tunisia Economic Monitor). As a result, the econ- forcing the government to introduce irrigation restric- omy only expanded in real terms by 1.2 percent in the tions in March. This resulted in reduced harvest and a first half of 2023, half the rate of 2022, and almost a significant loss of production. The cereal sector—which quarter of the 2021 rate (4.4 percent). provides a large share of the national diet—is a case in 1 FIGURE 1 • GDP Fell in the Second Quarter FIGURE 2 • Tunisia’ Economic Recovery Has of 2023 Been Slow (quarterly GDP in 2015 prices) (GDP, constant prices; 2019=100) 25,000 120 24,000 115 23,000 110 22,000 105 21,000 100 20,000 95 19,000 90 2019 2020 2021 2022 2023 (Q1) Q1-2018 Q3-2018 Q1-2019 Q3-2019 Q1-2020 Q3-2020 Q1-2021 Q3-2021 Q1-2022 Q3-2022 Q1-2023 Egypt Jordan Morocco Algeria Tunisia Source: Tunisia’s National Statistics Institute (INS). Source: World Bank Macro-Poverty outlooks. point. As discussed in the Fall 2022 issue of the Tuni- three quarter of overall 2023 GDP growth, so that ser- sia Economic Monitor, areas cultivated with wheat have vices comprised the bulk of growth (figure 4). Tourist been declining steadily in the last years (from 1.5 mil- flows rebounded to the levels of 2019 with more than lion hectares in 2011 to 1.1 million in 2021). This was five million visitors to Tunisia in January-July 2023. Most mainly the result of declining productivity due to more of the arrivals are from neighboring countries, but Euro- variable rainfall and soil impoverishment, and unfavor- pean tourists also increased. The manufacturing sec- able sale prices, which are fixed by the Tunisian Grain tor exhibited more contained growth rates, with textile Board (Office des Céréales – OdC). This year’s excep- and garments (+6 percent year-on-year) and mechanic tionally dry conditions have precipitated the produc- and electric industries (+5 percent) performing rela- tion losses, as the bulk of cereal production is rainfed. tively better than the rest of the sector. That is consis- Hence, domestic cereal production dropped by almost tent with the solid growth in those exports (see below). two thirds compared to last year.1 That is just over a On the other hand, the other primary sectors, includ- fourth of the level in the same period in 2020. This tra- ing mining and oil and gas, experienced a decline amid jectory illustrates a broader trend of the agricultural sec- a reduction in hydrocarbon production. Similarly, agro- tor, whose value added in the first half of the year fell by industry’s value added also declined (–6 percent) given 11.2 percent between 2019 and 2023 (figure 3). As rain- the strong link with agriculture. fall conditions are expected to deteriorate further in the With limited economic growth, the unemploy- future because of climate change, Tunisia needs to act ment rate increased slightly by the second quarter swiftly to build the resilience of agriculture as well as the 2023, stabilizing at the pre-Covid level, while the water sector as a whole (Box 1). participation rate remained below pre-Covid. The Hotels and restaurants and manufactur- unemployment rate rose to 15.6 percent in Q2 2023 ing—driven by external demand—were the main up from 15.3 percent a year ago (figure 5). This is one positive contributors to the economic growth in of the highest rates in the region—and it is particularly 2023 compensating the contraction of the primary high among women (21.1 percent). It is associated with sectors. The continued post-Covid recovery of tourism a slight year-on-year increase in labor force participa- in the first 6 months of 2023 enabled the robust growth tion (from 46 in Q2 2022 to 46.3 percent in Q2 2023). of hotels and restaurants (+ 17 percent year-on-year) as Hence the net job creation during the period has been well as transport services (+5 percent). These service sectors combined contributed 0.8 percentage points or 1 That is based on sales data from OdC. 2 TUNISIA ECONOMIC MONITOR – MIGRATION AMID A CHALLENGING ECONOMIC CONTEXT BOX 1: ADAPTING TO MORE FREQUENT AND SEVERE WATER SHORTAGES Its location makes Tunisia one of the countries most exposed to climate change in the Mediterranean region. Temperature increases expected to be accompanied by reduced and more variable precipitation. By 2050, overall water resources per person per year could decrease by up to 66 percent (from 366 m³ to 122 m³). Under the current trends in water demand, the reductions in water supply are projected to result in 28 percent of the demand being unmet by 2050 in the business as usual scenario. The decline in water quantity would be accompanied by a decline in water quality and an increasing incidence of water-borne diseases, with disproportionate impacts for the poor. Recent analysis of the World Bank explores the relationship between Tunisia’s development goals and climate change, in terms of both risks and opportunities. The analysis finds that major agriculture systems in Tunisia (olive, oasis, cereal, and livestock) are among the most vulnerable to climate change and water availability is a major concern. The economic and social impacts of future water shortages are going to be very significant. The World Bank projects that yields for olives, which accounted for 40 percent of total agricultural exports in 2019, could drop by as much as 69 percent by 2050. Agricultural production is expected to drop by between 29.1 percent and 33.1 percent relative to projections under a scenario of no climatic stress. This will have disproportionate impacts on the rural poor who have less resource to cope with climate impacts. These losses would translate into a reduction in real GDP by between 4.1 and 4.6 percent. A large portion of these losses could materialize by 2030, when the economy is predicted to be between 2.0 and 2.7 smaller than it would otherwise be without the dry conditions induced by climate change. This is the equivalent between TD 2.7 billion and TD 3.8 billion (US$0.9 billion and US$1.3 billion) per year. On the basis of the analysis a number of reforms and targeted investments can be suggested to ensure sufficient water is available for the needs of the country: • Managing water demand (including through measures such as pricing, quotas, and metering), improving efficiency and employing alternative groundwater storage techniques can maximize existing conventional water resources in Tunisia. • Promoting the use of nature-based solutions—especially those that support the recharge of groundwater reservoirs by restoring forests, wetlands, and oases – can help mitigate the anticipated decline in surface water. • Expanding non-conventional water sources (for example, by investing in the reuse of treated wastewater and desalinization) can complement conventional water sources. • Improving irrigation efficiency, water-use productivity and increasing uptake of climate-smart practices can help reduce water demand from the agricultural sector, which consumes around three quarter of Tunisia’s water. • Accompanying institutional reforms under the responsibility of the contracting authority, also to improve financial performance, soft incentives to reduce food and water waste along the value-chain and establishing a water monitoring and early-warning system would further enhance water management. • Developing disaster risk financing and insurance options, such as index insurance or insurance based on statement can guarantee losses of yield in times of extreme events, including drought. a Agence Française de Développement (2020). “Impacts des effets du changement climatique sur la sécurité alimentaire.” b Agence Française de Développement (ibid.) c This is included in the forthcoming World Bank’s Tunisia Country Climate and Development Report (CCDR). low with a total of only 3,500 jobs being created, with eign workers, including through irregular channels (see net loss of 15,500 jobs for female workers. This adds to part B of this publication). the already large penalty that women experience in the labor market, with a higher unemployment and a lower participation rate (figure 6). While unemployment is on More benign global prices and 2.  par with the 2019 rate, the participation rate remains the positive export performance around 2 percentage point below the pre-Covid rate, reduced the current account suggesting that the weak recovery has failed to reinte- deficit in the first part of 2023 grate into the labor market a significant number of work- ing age people discouraged during the pandemic. The Tunisia’s merchandise trade deficit improved in difficult labor market conditions strengthen the incen- 2023, boosted by favorable changes in interna- tives to migrate out of Tunisia for both Tunisian and for- tional prices. After the adverse terms of trade shock Recent economic Developments 3 FIGURE 3 • Value Added in the Agricultural FIGURE 4 • Agriculture Drove the Slow-Down in Sector Fell Sharply in the First Half Growth in 2023 of 2023 (half-yearly GDP growth by (agriculture value-added, TD decomposed by sector) constant prices and share in GDP) 8 2,400 Value added 12 6 2,300 (left) 12 4 2,200 11 2 2,100 11 0 2,000 10 –2 1,900 10 –4 1,800 9 –6 1,700 9 –8 1,600 8 –10 1,500 Share in GDP 8 –12 (right) H1–2016 H2–2016 H1–2017 H2–2017 H1–2018 H2–2018 H1–2019 H2–2019 H1–2020 H2–2020 H1–2021 H2–2021 H1–2022 H2–2022 H1–2023 1,400 7 Q1–2010 Q1–2012 Q1–2014 Q1–2016 Q1–2018 Q1–2020 Q1–2022 Agriculture Mining Manufacturing Ag. Value added Share GDP Services Net Taxes GDP Source: National Institute of Statistics. Source: Global Economic Prospects, World Bank. FIGURE 5 • Unemployment Has Returned to FIGURE 6 • Labor Market Outcomes Are Its (high) Pre-Crisis Level but More Particularly Adverse for Women Workers Left the Labor Market (female labor participation and (unemployment and labor unemployment rate, percent) participation rate, percent) 31 19 48.5 29 18 48.0 17 47.5 27 16 47.0 25 15 46.5 23 14 46.0 13 45.5 21 12 45.0 19 Q1–2019 Q1–2020 Q1–2021 Q1–2022 Q1–2023 Q1–2019 Q1–2020 Q1–2021 Q1–2022 Q1–2023 Unemployment (left) Participation (right) Unemployment Participation Source: INS. Source: INS. induced by the war on Ukraine in 2022, more benign unit values of exported electric equipment, which global prices helped reduce the trade deficit to TD accounted for half of the merchandise export growth, 12.2 billion in the first eight months of 2023 (7.5 per- increased year-on-year by 5.5 percent and knitted cent of 2023 GDP) from TD 16.9 billion (11.8 per- apparel (9 percent of export growth) by 20.3 per- cent of GDP) in the same period in 2022 (figure 7). cent (Figure 8). The price hike was even larger for oil This reduction was driven by the shrinking trade def- and fats (+52.5 percent), which benefited from the icit of mechanic industries and the expanding sur- tightening of the global olive oil supply. In spite of an plus of textile and garments, both of which benefited 8 percent reduction in quantities, Tunisia’s oil and from significant increases in prices. For instance, fats exports increased by 41 percent, contributing to 4 TUNISIA ECONOMIC MONITOR – MIGRATION AMID A CHALLENGING ECONOMIC CONTEXT BOX 2: THE REBOUND OF INTERNATIONAL TOURISM TO TUNISIA Besides contributing to the foreign exchange inflows, tourism also represents an important contributor to economic activity and employment in Tunisia. According to the World Tourism Organisation’s Tourism Satellite Account, tourism accounted for around 4.5 percent of Tunisia’s GDP in 2019. It accounted for 267,000 jobs, or 7.6 percent of total employment in 2018 according to the INS. Tourism revenues have been volatile since 2010 following the Tunisian Revolution in 2011, the war in Libya in the 2010s, the terrorist attacks in 2015 and the Covid pandemic in 2020–21. This evolution has weakened the industry’s financial viability with high level of indebtedness and low capacity to invest among the firms in the sector. Tourism is one of the sectors with the highest level of non-performing loans (NPLs) in Tunisia, which already has a high level of NPLs. In 2021, 5.5 percent of hotels closed down due to financial difficulties. The limited investment capacity has also constrained the efforts to upgrade the tourist offer in Tunisia, which collects only 0.2 percent of global tourism revenues despite receiving 0.6 percent of the world’s tourists. In addition, plenty of regulatory barriers restrict competition and harm the competitiveness of the sector. In a recent assessment the OECD identifies hundreds of such barriers, including complex, burdensome licensing procedures, onerous, overly detailed operational requirements and the influence of incumbents in decision-making bodies. Despite these challenges the tourism sector in 2023 continued the rebound of the second half of 2022, allowing the industry to return to the pre-Covid levels of arrivals. Boosted by a buoyant international demand for travel, Tunisia has captured a rising share of international tourists. It received 6.2 million non-residents in 2023 through the end of August, an increase of 62.4 percent over the same period in 2022 and just 1 percent below relative to 2019. Revenues rose by 47.2 percent to TD 5.2 billion (3.2 percent of GDP against 2.4 percent in 2022 and almost on par with pre-covid share of 3.3 in 2019). Arrivals from the main nationalities increased even compared with 2019, including neighboring and European countries. Algerian arrivals (46.6 percent of total arrivals) recorded a 4.5 percent increase and Libyans (31.1 percent of total arrivals) a 20.8 percent increase vis-à-vis 2019. Similarly, the number of French visitors (14.1 percent of total arrivals) increased by 11.7 percent and that of Germans (4.4 percent of total arrivals) by 3 percent compared to the pre-Covid period. On the other hand, Russian arrivals (accounting for 6.7 percent of total arrivals in 2019) collapsed since the war on Ukraine. a Alnabulsi et al. (2023). Non-Performing Loans and Net Interest Margin in the MENA Region: Linear and Non-Linear Analyses, International Journal of Financial Studies, 11(2). b Office National du Tourisme Tunisien, 2021 Annual Report. c Galtier, M. (2019), “Tunisie — Tourisme : les enjeux derrière la bataille des chiffres”, Jeune Afrique, http://www.jeuneafrique.com/790526/economie/ tunisie-tourisme-les-enjeux-derriere-la-bataille-des-chiffre d OECD (2023). Competition Assessment Reviews: Tunisia 2023. FIGURE 7 • Mechanic Industries Led the FIGURE 8 • The Main Tunisian Exports Benefited Moderation of the Merchandise Trade from Price Hikes in 2023 Deficit in 2023 (2022–23 percent change in unit (trade balance by sector Jan–Aug value and share in total merchandise 2023, TD million) export, Jan–Aug) 2,000 50% 40% –3,000 30% 20% 10% –8,000 0% Fats and oils Vehicles and parts Construction material Apparel, knitted Plastic articles Parts of aircraft Footwear Worn clothing Apparel, not knitted Glass and glassware Optical instr. Electric equip. Articles of iron or steel Mechanical appliances Articles of leather –13,000 –18,000 2021 2022 2023 Textile & garments Mining Agri Energy Mechanic industries Other manuf. Trade balance Unit value change Export contribution Source: World Bank staff elaboration on INS data. Source: World Bank staff elaboration on INS data. Recent economic Developments 5 FIGURE 9 • Energy Account for an Increasingly FIGURE 10 • The Trade Deficit along with Tourism Dominant Share of the Trade Deficit Receipts Helped Reduce the Current (energy trade balance as a share of Account Deficit total merchandise trade deficit, six- (quarterly data, TD million monthly moving average) current) 4000 3000 60 2000 1000 50 0 –1000 –2000 40 –3000 –4000 –5000 30 –6000 T1–2016 T3–2016 T1–2017 T3–2017 T1–2018 T3–2018 T1–2019 T3–2019 T1–2020 T3–2020 T1–2021 T3–2021 T1–2022 T3–2022 T1–2023 20 10 Services Factors' income Transfers Jan Jan Jan Jan Jan Jan Jan Current Account Balance 2017 2018 2019 2020 2021 2022 2023 Goods Source: Central Bank of Tunisia. Source: Central Bank of Tunisia. a significant shrinking of the agricultural and agro- current account deficit (CAD) in the first half of industrial trade deficit. the year. The significant reduction in the merchan- The energy deficit widened in spite of dise deficit was accompanied by the continued recov- more favorable prices, continuing to account ery of tourism, which benefited from a robust summer for the bulk of the merchandise trade deficit. season. Receipts grew by 47 percent year-on-year As a large energy importer, Tunisia benefited from as of the end of August 2023, reaching TD 5.2 bil- a reduction in global energy prices in early 2023 as lion (3.4 percent of GDP compared to 2.4 percent the global impact of the Russian invasion of Ukraine of GDP in 2022). They surpassed remittance inflows dissipated. The average price of hydrocarbons (TD 5.1 billion) which recorded a more modest imported by Tunisia declined by 18.8 percent in the increase (+5.1 percent) but which remain a key source first eight months of 2023 compared to the same of foreign exchange for Tunisia (see part B of this pub- period in 2022. Yet, imported quantities increased lication). As a result, the current account deficit (CAD) by 19.3 percent as Tunisia’s production of oil and fell from TD 7.0 billion in the first half of 2022 (4.1 per- gas declined.2 Thus, energy imports declined only cent of GDP) to TD 2.7 billion (1.5 percent of GDP) by 3.1 percent in value. On the other hand, energy over the same period in 2023 (igure 10). exports declined by more than a quarter along with production. As a result, the energy trade balance Despite the lower CAD, securing 3.  deteriorated further, accounting for 53.4 percent of sufficient external financing the merchandise trade deficit in the first 8 months remains challenging of 2023. That share has been gradually increasing over time, more than doubling since 2017 (Figure 9). The lower CAD eases the pressure on the exter- That reflects the country’s failure to develop alterna- nal financing needs, which however remain sig- tive sources of energy, particularly renewables (see the Tunisia Economic Monitor 2023 Spring edition 2 In the first six months the production of oil declined for the causes behind this failure). by 8 percent while that of natural gas by 11 percent The narrowing trade deficit along with the (source: Ministry of Industry, Mining and Energy (2023) rebounding of tourism exports brought down the Conjoncture Energétique, June). 6 TUNISIA ECONOMIC MONITOR – MIGRATION AMID A CHALLENGING ECONOMIC CONTEXT FIGURE 11 • With Weak FDI and Portfolio Flows, FIGURE 12 • Amid Pressures on External Tunisia Relied on Sovereign Borrowing Financing Needs the Dinar Remained to Cover its External Needs Relatively Stable (data by semester, TD million (TND per 1 EUR and per 1 USD) current) 3.5 14,000 3.4 12,000 3.3 3.2 10,000 3.1 8,000 3.0 6,000 2.9 2.8 4,000 2.7 2,000 2.6 January-22 February-22 March-22 April-22 May-22 June-22 August-22 September-22 October-22 November-22 December-22 January-23 March-23 April-23 May-23 June-23 July-23 0 H1-2016 H2-2016 H1-2017 H2-2017 H1-2018 H2-2018 H1-2019 H2-2019 H1-2020 H2-2020 H1-2021 H2-2021 H1-2022 H2-2022 FDI+portfolio Borrowing External financing needs H1-2023 USD/TND EUR/TND Source: World Bank staff estimation on the basis of Central Bank of Tunisia data. Source: World Bank staff estimation on the basis of Central Bank of Tunisia data. nificant in light of the forthcoming heavy debt of Tunisia to raise additional sovereign financing. In repayment schedule. The lower-than-expected the first half of the year public external borrowing cov- CAD is likely to reduce somewhat Tunisia’s external ered 18 percent of the government estimated external financing needs, which the budget law estimated at financing for 2023. TD 14.9 billion for 2023 (9.2 percent of GDP). How- Foreign reserves and the Dinar have ever, the needs are going to remain significant given remained stable in spite the uncertain external the large external debt service, with TD 6.8 billion financing conditions. The narrowing of the CAD in reimbursement of principal in 2023, more than along with recent additional external financing, nota- 70 percent of which is due in the last two quarters bly from Saudi Arabia, helped to ease the pressure of the year.3 on foreign exchange reserves. As of the end of Sep- In the absence of private sources of capital, tember 2023, reserves covered 118 days of imports Tunisia continues to depend on sovereign lend- (TD 26.7 billion), 6 days more than the coverage on ing to finance its external needs amidst uncertain the same day in 2022 (TD 23.7 billion) and 18 days financing conditions. To cover its external financ- more than the beginning of the year (TD 22.9 billion). ing needs Tunisia cannot rely on international pri- This provides some buffer on the external side. In the vate financing any longer: the country has lost access same vein the Dinar has also remained relatively sta- to international financial markets and bond spreads ble throughout 2023 vis-à-vis the main currencies remain elevated.4 At the same time foreign direct (Figure 12). investments and portfolio flows continue to cover only a small share of the external financing needs (fig- ure 11). As a result, Tunisia depends mainly on sov- ereign financing (concessional or otherwise) to fund 3 The figures are based on the 2023 Budget Law. 4 Since 2020 Tunisia’s sovereign credit rating is widely its external needs. That financing has been declin- assessed noninvestment grade (including by Moody’s, ing over the past couple of years as Tunisia struggled Fitch Ratings and Rating and Investment Information) to cover its financing needs. The impending external and the Tunisian government has not been able to issue debt reimbursement would require additional efforts foreign-denominated bond. Recent economic Developments 7 BNA Credits to Office Des Céréales FIGURE 13 •  FIGURE 14 • Hard Wheat Imports Remained Flat Increased almost Four-Fold since 2019 Even in the Face of a Significant (TD million and share of OdC in Drop in Domestic Production total credit extended by BNA, end (thousands of tonnes sold by OdC in of June of each year) Tunisia by source, Jan–Jun) 7,000 35% 700 6,000 30% 600 5,000 25% 500 400 4,000 20% 300 3,000 15% 200 2,000 10% 100 1,000 5% 0 2021 2022 2023 2021 2022 2023 0 0% 2019 2020 2021 2022 2023 Soft wheat Hard wheat Office des Céréales SOEs Share BNA Import Local prod Stock Sale Source: Banque Nationale Agricole. Source: Office des céréales, cited in Observatoire Raqabah (2023) “Crise du pain et de la semoule ... Crise réelle ou complot ?”. Shortages of basic products have 4.  This import compression has translated continued, partly fueled by the into shortages of basic products, exacerbated system of subsidies and the drop by the drop in domestic agriculture production. in agricultural production, going The increasing constraints to imports faced by SOEs hand in hand with rising debt of has affected several basic products, including cof- state-owned marketing boards. fee, tea, vegetable oils, wheat (soft and hard), med- icines, causing repeated shortages in key markets As external financing conditions remain tight, since 2022.6 For cereals, as the drought decimated imports continue to be compressed particularly for Tunisia’s hard wheat harvest in early 2023, the OdC those products imported by increasingly indebted was unable to step up its imports to compensate for state-owned enterprises (SOEs). As Tunisia contin- the shortfall (figure 14). In the absence of sufficient ues to face challenges in securing the needed external wheat stocks, the quantity of hard wheat supplied to financing, compressing imports remain an important the market dropped by 18 percent in the first half of strategy to achieve the external balance.5 That is par- 2023 compared to 2022. That contributed to the short- ticularly the case for highly indebted SOEs, which hold ages of hard wheat products, notably semolina. Given the monopoly over the import and distribution of spe- the substitutability between hard and soft wheat, the cific products. The Office des Céréales (OdC), which shortfall seems to have also affected products usually has the monopoly over the import and distribution of wheat, is a case in point. Its debt to the Banque Natio- 5 See the Spring 2023 issue of the Tunisia Economic nale Agricole (BNA), OdC’s main creditor, almost qua- Monitor. drupled between since 2019, reaching TD 5 billion in 6 Different SOEs which effectively act as marketing boards June 2023, equivalent to 30 percent of BNA’s stock hold the import monopoly of these products. Wheat is imported by the OdC; coffee and tea by the Office du of outstanding credits (Figure 13). This over-expo- Commerce (OCT); vegetable oil by the Office Nationale sure constrains OdC’s access to additional credit, and de l’Huile (ONH); medicines by the Pharmacie Centrale. hence its ability to import the needed wheat in a timely All of these SOEs have accumulated increasing debts fashion. over the past years, largely financed by domestic banks. 8 TUNISIA ECONOMIC MONITOR – MIGRATION AMID A CHALLENGING ECONOMIC CONTEXT BOX 3: THE LOSS-MAKING BUSINESS OF SELLING BAGUETTES IN TUNISIA The case of the baguette exemplifies how the system of price FIGURE 15 • Without Considering Processing controls is responsible for the increasing indebtedness of SOEs. Costs, the Purchasing Price of The baguette is one of the main staple foods in the diet of Tunisian Wheat Is Lower than Consumer households. Around 2.7 billion baguettes are produced every year Price for the Baguette since 2022 in Tunisia (around 1 baguette per adult per day), with estimates (prices and costs in TD of wheat suggesting that around 15–20 percent of those are either wasted for 1000 baguettes) or used for other purposes than human consumption in Tunisia (e.g., animal feed, illegal exports). 1,400 The price of the baguette has been maintained fixed by decree since 1,200 2011 at TD 0.19. Hence the price of 17 baguettes is around $1 at the current exchange rate, one of the lowest prices in the world according 1,000 to the World Bank’s International Comparison Program. While the price remained fixed, production costs have not. In particular, the international 800 price of soft wheat, which is the baguette’s main ingredient, has moved considerably over the past decade (Figure 15). As Tunisia produces 600 very little soft wheat, the wheat import price is an accurate indication of 400 the cost of the ingredient. The OdC is the monopoly importer of wheat in the country and distributes the imported soft wheat at a price below 200 the import cost to the flour millers (see the Tunisia Economic Monitor 2022 Summer issue). As the Dinar denominated price increased 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 significantly over time, the purchasing cost alone of the wheat needed to produce a baguette was higher than the price of the baguette. Those costs do not include the other costs of processing, distribution, so Consumer Purchase price they provide a sense of the extent to which price controls generate price (dinars) sale losses. In principle such losses are entirely absorbed by the state through the subsidies and transfers to SOEs in the budget. However, as Source: World Bank staff estimation on the basis of data by the Office de Cereals. the budget has been particularly tight in recent years, part of the losses is increasingly absorbed by the SOEs. a A study by Tunisia’s Institut National de la Consommation published in 2019 estimates that bread has the highest rate of wastage (16 percent of total bread purchased) among consumer products in Tunisia. made with soft wheat, particularly flour and its deriva- ingly unable to cover those losses, they translate into tives, including bread. increased indebtedness for SOE. In the current condi- The system of price control that regulates tions, it will be difficult to secure adequate supplies of the markets of these basic products is the main basic products sustainably without reforming the sys- cause of the increasing indebtedness of SOEs tem of price control and the associated import/distri- and hence of the current shortages. Many of the bution monopolies over those products. basic products, which have been in short supply in the market, are subject to strict price control by law.7 Inflation moderated somewhat 5.  These controls maintain the prices stable for con- from the record levels of early sumers, often for years, irrespective of the changes 2023 but it remains elevated in the underlying costs of producing and/or distribut- ing those products (see box 3 for an illustration using Inflation started to moderate since the peaks of the case of the baguette). The resulting losses are typ- February 2023 on the back of lower global prices ically absorbed by the State-owned marketing boards that are responsible for the import and/or distribu- 7 See the Tunisia Economic Monitor 2022 Summer issue tion of the products. As the government is increas- for a more detailed treatment of the issue. Recent economic Developments 9 and weak domestic demand. After 18 consecu- This presents a significant challenge particularly for tive months of increase, year-on-year price inflation lower income households, for which food accounts declined slightly from the record levels of Febru- for a relatively greater share of expenditures. To the ary 2023 (10.4 percent) to 9.0 percent in September extent that inflation reduces real incomes, survey 2023 (Figure 16). This followed the reduction in core evidence suggests that could strengthen the inten- inflation (from 8.1 in January 2023 percent to 7.2 per- tions of Tunisians to migrate using irregular and more cent in August), driven in part by the weak domes- risky channels (see part B of this publication). In fact tic demand given the slowdown in economic growth.8 Tunisia is the only country in the region where infla- The decline in international prices compounded this tion—particularly food inflation—was higher in August effect, helping reduce the pressure on domestic 2023 vis-à-vis a year earlier (figure 17). prices. Driven by the drop in international prices of The recent government measures to con- energy, cereals and iron and steel, Tunisia’s merchan- tain food prices focused on hoarding behavior dise import prices declined on average by 1.1 percent and enhancing price controls but food inflation over the first seven months.9 That allowed Tunisia to remains elevated. The government has taken several implement a price freeze of energy products with elec- measures since 2022 to reduce food inflation, includ- tricity and gas inflation declining from 14.9 percent in ing through a new law punishing hoarding and new February 2023 to 1.2 percent in September. regulations controlling food prices and distribution However, inflation is still high, particularly channels. However, these measures do not appear for food, as the drought and import compression to have yielded the desired effect, as other factors, have reduced the supply in domestic food mar- including the shortfall in supply and imports linked kets. Despite the decline, inflation remains well above the 2021–2022 average (7 percent) and food inflation 8 Core inflation is computed by excluding energy and food is particularly high (13.9 percent). While the rate of products from the CPI. price increases for food have been historically higher 9 That is an average obtained by weighing each 2-digit sector level price change by the corresponding share in than average inflation, the gap has been growing total Tunisian merchandise import in the first 7 months. this year as the drought and the import compression reduced the domestic supply of agricultural products. FIGURE 17 • Unlike other Countries, Food Inflation in Tunisia Increased Over the Last Year FIGURE 16 •  Inflation Started to Decline in 2023 Percentage point change (y-o-y), but it Remains High August 2023 vs. 12 months ago (year-on-year percent increase) 4 15% 2 0 –2 10% –4 –6 5% –8 –10 Saudi Arabia Tunisia Kuwait Qatar Oman Bahrain Morocco Algeria EU Jordan USA 0% Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 Jul-22 Oct-22 Jan-23 Apr-23 Jul-23 Food inflation CPI Core inflation Headline Food Source: Central Bank of Tunisia. Source: Various central banks, World Bank estimates. 10 TUNISIA ECONOMIC MONITOR – MIGRATION AMID A CHALLENGING ECONOMIC CONTEXT to the drought and the monopoly of highly indebted FIGURE 18 • The Hike in Consumer Prices during SOEs, seem more important drivers of inflation. 2021–2023 Was Correlated with Neither Money Growth nor Credit Inflation remains well above the nominal Growth interest rate, even though the latter has remained (year-on-year percent Increase) stable in 2023. Declining inflation eased pressure on 0.16 the Central Bank (CBT), which has maintained its key 0.14 policy rate unaltered at 8 percent since the beginning 0.12 of 2023. As a result, real interest rates remain negative. 0.10 It remains unclear to what extent the policy rate may 0.08 0.06 affect this inflation episode in Tunisia. The decline in 0.04 total credit growth and money supply in 2020–22 along 0.02 with the hike in the policy rate coincided with the spike 0.00 31/01/2015 30/11/2015 30/09/2016 31/07/2017 31/05/2018 31/03/2019 31/01/2020 30/11/2020 30/09/2021 31/07/2022 31/05/2023 in inflation (Figure 18), which is not consistent with the monetary nature of inflation. Rather the most plausible hypothesis is that the inflation hike has been driven by the increase in international prices following the post- Total credit growth CPI growth M3 growth Covid supply bottleneck along with some depreciation Source: Central Bank of Tunisia. of the Dinar (see Summer 2022 issue of the Tunisia Eco- nomic Monitor). The challenge for the authorities con- tinues to be to avoid inflationary pressures fueled by a On the other hand, direct taxes showed greater resil- price-wage spiral. The effectiveness of this policy will ience (+12 percent) as their largest component—labor depend on accompanying measures to pursue macro- income taxes—is less responsive to short-term varia- economic stabilization and adopt the structural reforms tions in growth. needed to resume a sustainable growth trajectory. The compression of the public wage bill Maintaining a strong and independent Central Bank growth allowed the balancing of the budget on will be a central pillar in the pursuit of price stability. a cash basis in the first half of the year despite the modest tax performance. The public wage bill The budget continues to be 6.  only grew by 2.8 percent in the first six months of under pressure as the low growth 2023 relatively to the same period in 2022. While affects tax revenues Tunisia still has one of the highest public wage bills in the world relative to the size of its economy, it The increase in tax revenues in the first half of declined from 15.1 percent of GDP in the first half of 2023 has been more modest than expected, 2022 to 13.7 percent in 2023 and from 55 percent dragged by the slowdown in growth. The budget to 53 percent of total public expenditures. The rela- execution report shows that tax revenues grew by tive compression of the wage bill follows the agree- 8.3 percent in the first six months of 2023 compared ment between the government and the trade union to the same period in 2022. That is significantly below (UGTT) in October 2022 and the continued freeze both the 2023 Budget Law’s projection (15.3 percent), of public sector recruitment. This allowed to contain the 2022 growth rate (16.6 percent), and the inflation overall expenditure growth to 6.9 percent in spite of rate so that tax revenue collection actually contracted the significant expansion of subsidies and transfers (Figure 19). The comparatively modest performance (+25.6 percent, growing from 4.3 percent to 4.8 per- of indirect taxes, particularly VAT (2.1 percent growth) cent of GDP). Capital expenditures continued to grow and customs (–1.1 percent), weighted down over- below the rate of overall expenditure (+5.9 percent) all tax revenues. That is consistent with the effect of and its share in GDP declined further to 2.3 percent the growth slowdown, with lower demand for con- (from 2.5 percent in the first half of 2022). The mod- sumption and investments, including for imports. erate growth in expenditures helped maintain the Recent economic Developments 11 Tax Revenues Under-Performed in the FIGURE 19 •  FIGURE 20 • A Tale of Two Expenditures: First Half of 2023 Subsidies Versus Capital (percent growth over same period in Expenditures previous year) (percent of GDP) 10% 23 8% 18 6% 13 8 4% 3 2% –2 0% Total Direct VAT Customs Excises 2016 2017 2018 2019 2020 2021 2022 2022 2023 budget 2023 (H1) Subsidies Public capital expenditures Source: World Bank staff elaboration on data from Tunisia’s Ministry of Finance. Source: World Bank staff elaboration on data from Tunisia’s Ministry of Finance. budget in balance in the first half of 2023, in line with of GDP between 2017 and 2022, reflecting rising pub- the result in 2022. lic expenditures and the deceleration of the econ- Reversing the decline in public capi- omy during the Covid-19 crisis. The majority of the tal expenditures by re-orienting less productive debt (58 percent) is foreign denominated, although recurrent expenditures continues to be key to Tunisia has increasingly tapped into local markets to revive economic growth. With slowing economic finance the debt as access to international markets growth and employment creation, successive govern- has become restricted.10 The debt figure cover only ments over the past decade have increased recurrent the central government’s but not SOEs’ debt, much public expenditures to provide public employment of which is guaranteed by the state. In the first half of and to keep market prices for basic goods and 2023, debt rose moderately compared to the end of services below cost recovery. Expenditures on 2022 (4.3 percent), benefiting from the balanced bud- subsidies(for energy and food products) grew four- get. However, to the extent that the cash basis budget fold from 2 percent to 8 percent of GDP between 2016 hides some accumulation of arrears (e.g. to the SOEs), and 2022 (figure 20). These measures crowded out the debt situation could in fact be more burdensome public investments, which declined from 6 percent to than the figures suggest. The growth of public debt 3 percent of GDP over the same period. Reversing has translated into an increase in interest payments, this decline in capital expenditures is crucial to revive raising Tunisia’s financing needs. Interest payments Tunisia’s growth trajectory. more than doubled from TD 2.3 billion to TD 4.7 bil- lion between 2017 and 2022, and they grew a fur- The high public debt continues 7.  ther 10 percent in the first half of 2023 relative to the to put pressure on the domestic same period in 2022 (although they remained stable banking system at around 3 percent of GDP and 8 percent of exports). Given the limited access to international The sustained budget deficits of the past years financing, the Central Bank (BCT) continues to have maintained public debt at a level among the highest in decades, raising debt service as well. 10 The domestic share of the debt moved from 27 percent Public debt grew from 66.9 percent to 79.4 percent in 2018 to 42 percent in 2022. 12 TUNISIA ECONOMIC MONITOR – MIGRATION AMID A CHALLENGING ECONOMIC CONTEXT refinance the domestic banking sector for trea- FIGURE 21 • The Share of Net Government sury bond purchase. Some financing partners, Receivables in Total Credits Continues to Increase as Credit including Afreximbank and Saudi Arabia, pledged Growth Falters and—in some cases—disbursed new funds in the first (year-on-year percent increase) half of 2023, although at relatively high interest rates 34 16 (hovering close to 10 percent). Despite these cases, 32 14 Tunisia’s access to foreign funding has remained lim- 12 ited, as noted above. Hence, the government contin- 30 ued to use domestic financing through local banks. 10 28 As a result, the domestic component of the pub- 8 26 lic debt accounted for 78 percent of debt increase 6 24 4 between 2018 and the first half of 2023. The domestic 22 2 financing led to an increase in the Central Bank’s refi- nancing rate to local banks.11 20 0 12/31/2020 9/30/2021 30/06/2022 3/31/2023 The sustained use of local funding to Share of credits to government (left) finance the public debt continues to crowd out Total credits growth, y-o-y (right) credit to the economy. Indeed, the injection of liquidity through refinancing operations is directing Source: Central Bank of Tunisia. bank liquidity towards government lending, which is likely to crowd out credit to the rest of the economy. ing out of the rising credit to SOEs vis-à-vis private The banking sector’s exposure to the State continues credit, as illustrated by the case of the Office de Cere- to grow at an annual rate of more than 12 percent, als with BNA (see Box 4). while the share of loans to the economy is decreas- ing with a growth rate of 8 percent. As a result, the share of central government in total claims of the 11 Refinancing consists of the central bank lending money banking sector increased from an average of 14.4 per- to banks with liquidity needs, generally short-term. They are carried out on the initiative of central banks (through cent in 2015 to 31.1 percent in the first half of 2023 tenders) or banks (lending facilities). While refinancing is (Figure 21). In a context of limited credit growth, this associated with money creation, the relation is not one- pattern has displaced credit to the rest of the econ- to-one as it depends on the terms of the reimbursement omy. And this pattern does not account for the crowd- and the loan maturities. RISING BNA EXPOSURE TO THE OFFICE DES CÉRÉALES LIKELY UNDERMINING BOX 4:  THE BANK’S ACTIVITY The debt of the Office des Céréales (OdC) vis-à-vis the Banque Nationale Agricole (BNA) reached a record TD 5.0 billion (3.8 percent of GDP) as of June 30 2023, around 30 percent of total BNA’s on-balance sheet commitments. They rose by 3.9 percent compared to the end of 2022 and 12.3 percent compared to a year before. In addition, the State guarantees the entirety of OdC’s commitments against counterparty risk (comprising principal, interest, and commissions). At the same time the government is facing increasing difficulties to secure the necessary financing to OdC for the losses it incurs due to the cereal subsidies. The financing of the OdC has had a significant impact on BNA’s cash position, with a negative balance of TD 5.1 billion at the end of June 2023, compared with TD 4.5 billion at the end of December 2022. Along with the growing lending exposure to other SOEs, this has likely contributed to reduce BNA’s lending to other parties. As BNA credit to OdC grew almost 4-fold between 2019 and June 2023, credit to private clients grew only 12 percent over the same period (see Figure 13 above). Source: Interim financial statements of BNA, August 2023 and BNA financial statements 2022 and 2021. Recent economic Developments 13 Growth prospects are worsening 8.  The budget deficit is expected to decline somewhat to as external financing conditions 5.6 per cent of GDP in 2023 (compared to 6.6 percent remain challenging of GDP in 2022). That is mainly driven by the com- pression of expenditures, particularly the wage bill The World Bank forecasts a 1.2 percent GDP and to some extent basic products’ subsidies, which growth in 2023—a significant slowdown com- should benefit from lower international prices. The pared to 2021–22—with a slight uptick to 3.0 per- CAD is projected to moderate substantially to 4.0 per- cent in 2024 conditional on the moderation of the cent of GDP in 2023 (from 8.6 percent in 2022) due to drought. The forecast reflects the performance of the strong travel exports, improved terms of trade but also economy in the first half of 2023 and reflects the chal- continued import compression. However, the hike in lenging conditions linked to the drought, particularly oil prices since July 2023 presents a clear downside for agriculture, the lack of visibility around debt financ- risk for both the fiscal and the external balance. ing and the pace of structural reforms planned by the However, the financing of the deficits government. With this growth rate, real GDP in 2023 will require a significant scale-up of the exter- would still be 1.3 percent below its pre-Covid 19 level. nal financing in the face of the heavy debt reim- Assuming more stable financing conditions and a mod- bursement schedule. Despite the lower deficits, eration of the ongoing drought, growth is expected to gross financing needs are expected to rise further eventually gain some ground, reaching 3.0 percent in to 16.0 percent of GDP in 2023 (from 12.6 percent 2024 and 2025. This slight rebound would allow the in 2022), mainly driven by rising debt amortization. In economy to achieve a 2.4 percent annual growth over fact, almost two-thirds of the financing is expected to the post-Covid period. This appears to be the modest be amortization, as a large amount of debt is com- structural growth rate of an economy dragged by pre- ing due in the latter part of the year. While this helps existing structural weaknesses and the uncertainty to reduce the level of public debt somewhat (from around financing conditions. 79.8 percent in 2022 to 76.9 percent of GDP in 2023), The 2024 growth forecast is subject to sig- it also increases Tunisia’s reliance on external fund- nificant downside risks related to the evolution of ing sources, which should account for around 57 per- the drought, and the pace of structural reforms cent of total financing. With FDI projected to be stable planned by the Government, and financing condi- and minimal portfolio investments, sovereign lending tions. Growth projections for 2024 would be signifi- would still have to cover the external financing needs cantly lower should Tunisia not implement decisive as Tunisia continues to be cut off international capi- fiscal and pro-competition reforms and/or should tal markets. An IMF Staff level agreement on an EFF available financing not be sufficient to cover Tunisia’s with the Tunisian authorities was reached in October external needs. These conditions could generate a 2022 with a view to being taken to the IMF Board for shortage of foreign exchange in the economy, a ration- consideration shortly after. However the program has ing of imports, and potentially lead to a depreciation of not been submitted to the IMF Board since then. It is the dinar, thus aggravating existing inflationary pres- unclear at this stage how the lack of an IMF program sures—and this at a time when important external debt will delay external financing as it could have unlocked repayments are falling due at the end of 2023 and early other external financing as well. 2024. As a result, economic activity and employment If the pace of reforms and the level of could be affected. In addition, should the drought con- financing remain sufficient, we project a slight ditions persist beyond this year, the 2024 projections uptick in growth over the medium run along with could also be revised downwards given the negative some stabilization of the macro and fiscal imbal- impact on agriculture and the trade balance. ances. We expect the economy to slightly acceler- Tunisia’s twin deficit is expected to mod- ate its pace of growth to 3 percent in 2025–26. That erate on the back of more favorable commodity would entail a slow convergence towards the long- prices and some compression of expenditures. run growth path, from which the economy deviated 14 TUNISIA ECONOMIC MONITOR – MIGRATION AMID A CHALLENGING ECONOMIC CONTEXT TABLE 1 • Key Macroeconomic Indicators 2020 2021 2022 2023 2024 2025 Real GDP Growth, at constant market prices –8.8 4.4 2.4 1.2 3.0 3.0 Private Consumption –2.1 2.4 2.2 2.7 3.8 4.5 Government Consumption –1.0 1.5 –1.2 –2.9 –0.5 –0.5 Gross Fixed Capital Formation –19.9 3.3 1.3 –7.3 2.9 5.0 Exports, Goods and Services –20.0 11.8 15.2 9.4 5.1 3.3 Imports, Goods and Services –16.6 10.9 9.3 8.6 4.8 5.1 Real GDP Growth, at constant factor prices –8.7 4.5 2.6 1.2 3.0 3.0 Agriculture 0.4 –2.7 0.7 –8.0 3.0 2.1 Industry –10.1 8.7 –0.3 0.7 2.1 2.5 Services –9.6 4.1 4.0 2.8 3.3 3.3 Inflation (Consumer Price Index) 5.6 5.7 8.3 9.2 8.0 7.0 Current Account Balance (% of GDP) –6.0 –6.0 –8.6 –4.0 –4.6 –5.5 Foreign Exchange reserves (US$ bn) 8.2 8.3 7.4 9.4 10.0 11.2 Foreign Exchange reserves (months of imports) 4.1 3.1 3.0 3.5 3.4 3.4 Central Government Overall Fiscal Balance (% of GDP) –8.7 –7.6 –6.6 –5.6 –3.6 –3.1 Primary Fiscal Balance (% of GDP) –5.6 –4.7 –3.4 –2.3 –0.2 0.3 Fiscal Revenues (% of GDP) 25.5 25.7 28.5 27.7 28.3 28.2 Fiscal Expenditures (% of GDP) 34.2 33.3 35.1 33.3 31.9 31.3 Gross financing needs of the Central Government (%GDP) 13.3 10.9 12.6 16.0 14.9 13.5 Central Government Debt (% of GDP)a 77.8 79.9 79.8 76.9 74.9 72.6 Interest payments (on CG debt; % of GDP) 3.1 2.8 3.2 3.3 3.3 3.3 a The figures for 2022–2023 are based on government data; 2024–25 are based on World Bank estimates on the basis of IMF and government projections. during the Covid-19 crisis, by mid-2030s. We expect medium-term prospects are conditional on the con- inflation to decrease somewhat due to the relatively tinuation of an ambitious pace of reforms, sufficient large post-Covid output gap and the mild increases in financing conditions and the stability of international public wages following the government-UGTT agree- energy prices, oil in particular. ment last year. These conditions along with the eco- nomic reforms should help Tunisia reduce its current account and budget deficits, easing financing con- 12 The finding applied whether using lower-middle or ditions. Furthermore, the slight increase in real eco- upper-middle income country poverty line (equivalent nomic growth should lead to a decrease in the poverty respectively to US$3.65/person/day and US$6.85/ rate below pre-Covid levels by 2025.12 However, these person/day in 2017 purchasing power parity terms). Recent economic Developments 15 B PART MAKING MIGRATION AN ENGINE OF GROWTH AND DEVELOPMENT FOR TUNISIA G iven the importance of migration in the cur- pace than emigration (6 vs. 17 percent). Maintaining rent public debate in Tunisia and abroad, a regular status as a migrant is challenging as obtain- and, equally, the importance of out- and in- ing a residence and a work permit can be cumber- migration for development in a longer historical as some, making them more vulnerable and less able to well as future perspective, this section of the Tuni- contribute to the Tunisian economy. sia Economic Monitor aims to provide data, historical Since the end of 2022, Tunisia has also become trends and benchmarking for the various migration an important transit country for irregular migration to flows into and out of Tunisia. Europe. In the first eight months of 2023, two third Emigration has become an increasingly impor- of irregular migrants to Italy in the Central Mediterra- tant strategy for Tunisians to cope with the challenging nean route—or more than seventy thousand people— economic and social situation. Tunisia’s emigration departed from Tunisia. Only 11 percent were Tunisians, flows increased over the last two decades and have while the remainder were mostly from sub-Saharan followed more irregular pathways since 2019. Emi- Africa. The rise in irregular departures has led to an gration yields economic benefits, as earnings abroad uptick in incidents and casualties off the Tunisian are often much higher than those received in Tunisia. coasts. More than 765 migrants died and 1,008 went These gains, however, are lower when migrants are missing while attempting to cross the Central Mediter- undocumented. Some of these emigrants also return ranean in the first half of 2023, three times the number home, bringing back skills and capital to invest. of casualties over the same period in 2021–22. Just like Tunisians emigrate in search of bet- Looking ahead, migration will likely become ter living conditions, over 60,000 foreigners had increasingly important for Tunisia (both inflows and immigrated to Tunisia as of 2020. Today, they make outflows), given the demographic transition in both up around 0.5 percent of the Tunisian population. In Tunisia (whose age pyramid in 2050 will resemble recent years their numbers have grown at a slower that of contemporary Italy ) and Europe. Tunisia could 17 help strengthen the match of emigrants with demand FIGURE 22 • The Number of Tunisians Living abroad through enhanced cooperation with desti- Abroad has Historically Been Significantly Higher than Foreigners nation countries, thereby increasing the long-term Residing in Tunisia benefits of migration for Tunisia, including through (stock of migrants to and from higher remittance and inflows, knowledge circulation, Tunisia) increased trade and capital inflows. Economic bene- 1,000,000 774,376 fits from immigration into Tunisia can be increased by 900,000 902,268 facilitating migrants’ regular status and strengthening 800,000 615,732 579,009 the recognition of qualifications. 700,000 486,964 476,933 465,549 600,000 500,000 Emigration: the importance of 400,000 Tunisia as a sending country has 300,000 60,145 risen over the past three decades 56,532 200,000 37,984 43,172 37,867 36,719 35,040 100,000 0 Emigration is becoming an increasingly impor- 1990 1995 2000 2005 2010 2015 2020 tant strategy for Tunisians to cope with the chal- Emigrants Immigrants lenging economic and social situation in the country. Emigration of Tunisians has been on the Source: UNDESA, 2020. rise in the past years as economic and social condi- tions deteriorated. That is reflected also by a steep Emigration of Tunisians has increased signif- increase in the intentions to emigrate, which (accord- icantly over the last two decades, becoming more ing to Arab barometer data) doubled between 2017 irregular since 2019. The flow of regular migrants and 2021. The link between the socio-economic situa- from Tunisia to Europe, measured as both the number tion and emigration is also consistent with the findings of entry and 12-month residency permits issued each of the INS’ national survey on international migration year, increased between 2009 and 2019 (Figure 23). in 2021 (Tunisia-HIMS). These suggest that unem- On the other hand, according to the European Border ployment is a key driver of Tunisians’ intentions to and Coast Guard Agency irregular crossings of Europe’s emigrate—unemployment is also associated with the borders by Tunisian nationals increased remarkably willingness to emigrate through irregular channels.13 since 2019, reaching more than 25,000 in 2022 alone. This trend consolidates Tunisia as a coun- With more than 54,000 arrivals (19 percent), Tunisians try of mainly emigration with the numbers of Tunisians living abroad at least 15 times higher than the number of foreigners living in Tunisia. 13 Restelli, 2023. Development and International Migration: The United Nations (UN) estimates a total of around The Effect of Income on Regular and Irregular Migration 900,000 Tunisian emigrants as of 202014, whereas Intentions to Europe. Population and Development the number of foreign-born residing in Tunisia stood Review, 49(1), pp.135–174. 14 UNDESA, Population Division, 2020. International at around 60,000 in the same year. According to the Migrant Stock 2020. Office for Tunisians Abroad (OTE), the estimated 15 UNDESA’s estimates rely on population censuses in stock of Tunisians residing abroad in 2022 was dou- destination countries and classify migrants on the basis of ble the UN number (1.8 million). The difference is due the country of birth. OTE’s figures are based on Tunisian to the different recording approaches between the UN nationals who register with embassies abroad and hence and the OTE data.15 The stock of Tunisian emigrants classify migrants on the basis of citizenship. In both cases, migrants with irregular status may be largely unaccounted for. increased over the years with the number of Tunisians 16 These orders of magnitudes are comparable to those living abroad being at least 15 times higher than the emerging from the 2021 Tunisia-HIMS, which estimates a number of foreigners residing in Tunisia since the total stock of 566,000 Tunisian emigrants, aged 15 and 1990s (Figure 22).16 above and a total of 58,990 immigrants in Tunisia (INS, 2021). 18 TUNISIA ECONOMIC MONITOR – MIGRATION AMID A CHALLENGING ECONOMIC CONTEXT Irregular Migration of Tunisians to FIGURE 23 •  FIGURE 24 • Remittances have Consistently Europe has Been Increasing Since 2019 Been the Most Important Foreign (Number of Tunisian emigrants to Financial Inflow for Tunisia Europe by type, 2009–2022) (percent GDP) 35,000 7% 30,000 6% 25,000 5% 20,000 4% 15,000 3% 10,000 2% 5,000 0 1% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Irregular migrants (Europe) Regular migrants (Europe) Residency (12 months - EU27) Remittances Net ODA FDI Source: Frontex for irregular migrants, OECD for regular migrants (all permits), Eurostat Source: World Development Indicators, Central Bank of Tunisia and Tunisia Statistical for 12-month residency permits. Institute. represent the main nationality of irregular migrants to (FDI) and official development assistance (Figure 24). have reached Italy via the Central Mediterranean Route Such flows are also more stable than the other flows between January 2019 and June 2023.17 including during periods of crisis. For many migrants and their families, income gains mean better living conditions and a greater ability to save and invest in Emigration has yielded significant businesses, housing, education, and healthcare. benefits to Tunisia and the Tunisian Some of the outward-bound migrants have population through several key come back to Tunisia, bringing back skills and channels capital to invest, although fewer return than those who emigrate, particularly among the high-skilled. Emigration yields significant economic benefits As of 2021, the Tunisia-HIMS survey estimates a total to Tunisians, particularly when it is regular. Emi- of nearly 211,000 Tunisians who have lived abroad, for gration to high-income countries usually leads to sig- three months or more, and have returned to reside in nificant increases in earnings for the migrant as wages for the same occupation are much higher in destina- tion than home countries.18 For instance, Tunisian 17 That is based on Frontex data on detections of irregular nurses could receive wages up to ten times higher migrants. 18 For example, controlling for the characteristics of in Germany and France.19 These gains, however, are workers and the differences in living costs, the wage of considerably lower when migrants are undocumented an immigrant worker in the United States is on average as they cannot access formal jobs because they fear 6.8 times higher (in real term) than an equivalent worker being detected and/or they lack the required licenses in the same occupation in the native developing country. and credentials. Tunisian emigrants have been sharing See Clemens, Michael A., Claudio E. Montenegro, and some of these gains with families and communities Lant H. Pritchett. 2019. “The Place Premium: Bounding the Price Equivalent of Migration Barriers.” Review of in Tunisia through remittances. In the last decades, Economics and Statistics 101 (2): 201–13. remittances have been the largest financial inflow to 19 Clemens, 2015. Global skill partnerships: a proposal Tunisia, reaching 6.6 percent of GDP in 2021–22, sev- for technical training in a mobile world. IZA Journal of eral times larger than both Foreign Direct Investment Labour Policy. Making migration an engine of growth and development for Tunisia 19 Tunisia, for a minimum of six months. Nearly one in five Immigrants’ Stock in Tunisia Remains FIGURE 25 •  returning migrants reported having made investments Relatively Low as a Share of the Resident Population in Tunisia. This share increases to 27 percent among (regular immigrants in percent of total those having emigrated for 25 years or more, as sav- resident population, selected countries) ings typically increase with the duration of migration. 15% However, the number of returnees is estimated to 14% 12.6% 13% have remained stable over the past decade, hovering 12% 12.4% around 7–8,000 per year, a number between 2 and 11% 10% 10.7% 6 times lower than that of new emigrants. The rate of 9% 8% return is particularly low among Tunisians with higher 7% 6% education.20 At the same time, some evidence sug- 5% 4% 0.6% gests that emigration is increasing among the highly 3% 0.5% 2% 0.3% educated. The secretary of the Tunisian Medical Asso- 1% ciation reported that more than 970 (7 percent) Tuni- 0% 1990 1995 2000 2005 2010 2015 2020 sian doctors left the country in 2021 among 14,000 Libya France Italy doctors working in Tunisia compared to 570 (4 per- Tunisia Morocco Algeria cent) in 2018, a 70 percent increase.21 These trends are consistent with the weak performance of the Tuni- Source: UNDESA for immigrants’ stock and World Development Indicators for population data. sian economy and the associated squeeze of wages, including in the public sector (see Part A of the TEM). Over the medium- to long-run, the impor- Immigration: Relatively few tance of attracting migrants to Tunisia will increase foreigners choose Tunisia as a given the demographic transition underway. Like destination country, while many face many middle- and high-income countries, Tunisia’s fer- significant challenges tility rate dropped significantly: from nearly 7 children in 1960 to only 2.06 in 2022 (below the replacement level). Just like Tunisians emigrate in search of better As a result, the ratio of the working age population to living conditions, some foreigners immigrate to the elderly declined from 13.5 to less than 7. Consider- Tunisia. Immigrants in Tunisia are a small fraction of ing such trends, the UN population prospects estimate the population by international standards. Today, they that Tunisia’s age pyramid will increasingly resemble make up around 0.5 percent of the Tunisian popula- that of contemporary Italy, and related needs of influx tion (Figure 25). The share of immigrants in the popu- of workers (figure 26). Immigration will be increas- lation is between 20 and 25 times lower than in close ingly important to address this demographic transition. European countries including Italy and France and It is challenging to maintain a regular status neighboring Libya. Tunisia’s share is in line with other as a migrant worker in Tunisia, making them more countries in the region including Morocco and Algeria. vulnerable and hindering them to fully contribute However, these figures are underestimated as they do 20 According to the Tunisia-HIMS survey, the majority of not include immigrants with irregular status. UNDESA returning migrants had primary education (37 percent) data show that the immigrants stock increased by or less (17 percent), while only 16 percent held a around 6 percent between 2015 and 2020, nearly university degree. three times lower than the growth in the stock of Tuni- 21 Khdimallah, M. (2022). “975 médecins ont préparé sian emigrants (17 percent) during the same period. un dossier de départ en 2021: De l’impossibilité de reformer”, La Presse. North Africans and Europeans account for most of 22 According to the survey, the stock of Tunisian emigrants the increase in immigration in 2010–20 (72 percent) increasing by 32 percent since 2014, and the stock of and of the stock of immigrants in 2020 (74 percent). immigrants increasing by around 11 percent during the The Tunisia-HIMS estimates similar trends.22 same period. 20 TUNISIA ECONOMIC MONITOR – MIGRATION AMID A CHALLENGING ECONOMIC CONTEXT FIGURE 26 • Tunisia’s Population Is Rapidly Aging Tunisia: Population in 1950 Tunisia: Population in 2022 Tunisia: Population in 2050 100+ 100+ 100+ 90–94 90–94 90–94 80–84 80–84 80–84 70–74 70–74 70–74 60–64 60–64 60–64 Age (years) Age (years) Age (years) 50–54 50–54 50–54 40–44 40–44 40–44 30–34 30–34 30–34 20–24 20–24 20–24 10–14 10–14 10–14 0–4 0–4 0–4 0.6 0.4 0.2 0 0.2 0.4 0.6 0.6 0.4 0.2 0 0.2 0.4 0.6 0.6 0.4 0.2 0 0.2 0.4 0.6 Population (millions) Population (millions) Population (millions) Males Females Males Females Males Females Source: United Nations World Population Prospects (2022). to the Tunisian economy. Interviews with migrants Mediterranean and it has increased the use of conducted by the International Organization for Migra- deterrence measures. In the first eight months of tion (IOM) in 2018 showed that the main obstacle to 2023, 73,829 people arrived irregularly in Italy by sea access formal employment in Tunisia is obtaining a from Tunisia. That is around 44 percent of all irregular residence permit, which is in turn required for a work migrants to Europe and two third of irregular migrants permit.23 The Tunisian Government reduced the num- to Italy via the Central Mediterranean route over the ber of such work permits between 2009–17 (Figure 27) period. As a result, Tunisia has overtaken Libya as the despite the increase in the number of immigrants to Tunisia. Both the legal framework and its enforcement make the process of obtaining a work permit cumber- 23 The interviews were conducted with a sample of 450 migrants from the Middle East, North Africa and some (see box 5). This results in limited legal access sub-Saharan Africa. IOM, 2019. Evaluation des besoins to the job market for migrants in the country.24 As a des communautes migrantes & des comminautes hotes result, the majority of migrant workers are employed en Tunisie. informally in Tunisia.25 Most irregular workers arrive 24 ILO, 2019. Diagnostic sur les processus de recrutement regularly in Tunisia for other purposes and work irreg- des travailleurs en Tunisie. ularly or end up overstaying their visas, especially 25 According to a 2016 survey by Terre d’Asile Tunisie, about four fifth of migrant workers were employed in the case of foreign students who are not allowed informally in 2016 (Terre d’Asile Tunisie, 2016. Portrait to work in Tunisia.26 The irregular status reduces the de migrants). This figure is confirmed by more recent migrants’ contributions to the economy.27 In addition it survey data collected by the Mixed Migration Centre exposes them to violations and exploitation, including in 2021 (Mixed Migration Centre (MMC), 2021. Hidden violations workers’ rights, forced evictions, violence.28 hardship of an unnoticed workforce: the economic lives of refugees and migrants in Tunisia), which finds that 88 percent of respondents were working based on a verbal Tunisia has become a major transit agreement. 26 Terre d’Asile Tunisie (ibid.). country for irregular migration to 27 World Bank (2023). World Development Report. Europe Migrants, Refugees, and Societies: World Development Report 2023. In 2023, Tunisia has become the main tran- 28 OMCT (2023). “Mapping of responses to human rights sit country for irregular migration in the Central violations: People in mixed migration flows inTunisia”. Making migration an engine of growth and development for Tunisia 21 BOX 5. TUNISIA’S LEGAL FRAMEWORK OF MIGRATION AND WORK The conditions of access of migrants to work in Tunisia are regulated by two main laws: Law No. 68–7 of March 8, 1968, relating to the conditions of foreigners in Tunisia and the Labor Code (articles 258 to 269). The process of obtaining a work permit is complex and can take several months to complete. The legal framework does not provide clear guidelines for obtaining work authorization, leaving significant discretion to the Tunisian administration.a This can lead to uncertainty and delays in the process. The Tunisian law establishes a strong connection between legal residence and work authorization. To work in Tunisia, migrants must maintain regular residence in the country, and their residence card must explicitly state that they are authorized to work. Even when migrants are able to obtain such a work permit, it is only valid for one year and must be renewed every year. This makes it difficult for migrants to sustain long-term employment. As a result, many migrants end up working informally without a contract or work authorization, without social protection and become more vulnerable.b The Tunisian law and the Labor Code provide for sanctions in the event of non-compliance with the rules concerning the employment of migrants. These sanctions apply to both employees and employers at fault. Indeed, a migrant worker who works without a contract or work authorization incurs the following sanctions: dismissal, financial sanction or/ and prison sentence (Labor Code, articles No. 258–2 and 266). In case of non-commitment of the previous articles, migrant workers risk the expulsion (Labor Code, article No. 267). The Tunisian legal system has integrated ILO standards to enhance the protection of migrants’ rights, in particular through the 2016 law on the prevention against all forms of human trafficking and the 2018 law on the protection against all forms of racial discrimination. However, Tunisia has not yet ratified the relevant ILO United Nations instruments relating to workers: Convention n°97 on migrant workers (revised) from 1949 and No. 143 on Migrant Workers (Supplementary Provisions) of 1975. a IILO, ONM and OHCHR, 2017. L’emploi formel et informel des travailleurs immigres en Tunisie. b Terre d’Asile Tunisie, 2020. L’accès au travail des migrants en Tunisie: du cadre juridique à la pratique. FIGURE 27 • Tunisia Granted Fewer Work Saharan Africans, particularly from Ivory Coast and Authorizations in a Period of Guinea, a marked departure from the previous years Increasing Immigration when Tunisians comprised the majority of departures. (number of work authorizations granted by the MFPE by main Most nationals from Côte d’Ivoire, Guinea and Camer- nationalities, 2009–2017) oon arriving in Italy mentioned having been residing in Tunisia for long periods before deciding to leave 9,000 amidst growing economic difficulties. However there 8,000 7,000 also reports of a growing number of sub-Saharans 6,000 only transiting via Tunisia.29 Over the past months, 5,000 Tunisia has strongly increased border controls and 4,000 patrolling as well as deterrence measures such as 3,000 relocating migrants away from the area of Sfax, the 2,000 main departure hub in Tunisia. 1,000 The rise in irregular departures has led to 0 an uptick in incidents and casualties off the Tuni- 2009 2010 2011 2012 2013 2014 2015 2016 2017 sian coasts. The Missing Migrants Project (MMP) of Europe (main countries) North Africa China & India Others the IOM estimates that 765 migrants died and a fur- ther 1,008 went missing while attempting to cross the Source: Ministère de la Formation professionnelle et de l’Emploi, 2016 and 2018. Central Mediterranean in the first half of 2023. That is main port of departure (Figure 28). Around 62,500 of 29 UNHCR, 2023. Italy - Sea arrivals dashboard, June 2023. those who departed from Tunisia were non-Tunisians Available at: https://data.unhcr.org/en/documents/ (figure 29). The overwhelming majority were sub- details/102839. 22 TUNISIA ECONOMIC MONITOR – MIGRATION AMID A CHALLENGING ECONOMIC CONTEXT FIGURE 28 • In 2023 Tunisia has Become the FIGURE 29 • Tunisians Account for a Minority of Most Important Departure Point for Arrivals from Tunisia Since the Last Irregular Migrants’ Crossing to Italy Quarter 2022 (number of Irregular Sea Arrival to (Nationality of Migrants Arriving Italy by Departure Point) by Sea to Italy Who Embarked in Tunisia) 20,000 18,000 16,000 15,000 14,000 12,000 10,000 10,000 8,000 5,000 6,000 4,000 2,000 0 0 January-18 April-18 July-18 October-18 January-19 April-19 July-19 October-19 January-20 April-20 July-20 October-20 January-21 April-21 July-21 October-21 January-22 April-22 July-22 October-22 January-23 April-23 July-23 Q1-2020 Q2-2020 Q3-2020 Q4-2020 Q1-2021 Q2-2021 Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 Q4-2022 Q1-2023 Q2-2023 Turkey Tunisia Libya Tunisians Non Tunisians Source: UNHCR, 2023. Italy Sea arrivals dashboard. Source: UNHCR, 2023. Italy Sea arrivals dashboard and Frontex detection data. more than triple the number of casualties in the same is the case for most migrants, whether high- or low- period in 2022 and 2021. This is an estimate of the skilled, regular, or irregular. The policy objective in this same magnitude as the years of the so-called “migra- case should be to maximize gains for all. For refugees, tion crisis” in 2015–16. The Central Mediterranean when the match is weak, the costs need to be shared— route remains the deadliest known migration route in and reduced—multilaterally. Since refugee situations the world, with more than 17,000 deaths and disap- can last for years, the policy objective should be aimed pearances recorded since 2014. UNHCR reports that to lower the hosting costs while maintaining adequate incidents are much more likely for Sub-Saharans trav- standards of international protection. When the match elling from Tunisia on metal boats.30 is weak and people are not refugees, difficult policy challenges arise, especially when migrants are in irreg- ular and distressed circumstances. While destination What policies can governments countries can regulate entry of these migrants, depor- implement to maximize the positive tation and refusal of entry can lead to inhumane treat- development impacts of migration ment. The restrictive policies in destination countries and mitigate the more adverse can also impose costs on some transit countries. The consequences? policy should reduce the need for distressed migration while development can play a critical role. The 2023 World Development Report offers a pol- As a country of mainly emigration, Tunisia icy framework to maximize the net gains of migra- could expand bilateral and regional mobility tion for sending, receiving and transit countries. That is based on the match between migrants’ skills 30 UNHCR, 2023. Italy – Sea arrivals dashboard, March and destination countries’ needs and the motives 2023. Available at: https://data.unhcr.org/en/ that drive individuals to emigrate.31 When the match documents/details/100615. of migrants is strong, the gains are large for them- 31 See World Bank (2023). Migrants, Refugees, and selves and for countries of origin and destination. This Societies: World Development Report 2023. Making migration an engine of growth and development for Tunisia 23 schemes to facilitate regular emigration and max- (a) the availability and technical capacity training imize gains at home and destination. At a time facilities at origin; (b) accessible costs of tuition and when large numbers of Tunisians are considering emi- subsistence; (c) accessible visas by the destination grating, expanding and strengthening these mobil- country at the end of the training; (d) accessible cer- ity schemes seems necessary to provide perspective tification at the end of the training; (e) timely involve- emigrants with access to legal migration pathways. ment of the private sector (employer) and joint training This access is crucial to ensure legal guarantees and (both at origin and destination).36 protection against abuse, access to a range of ser- As its importance as a migration receiv- vices in destination countries and enhanced gains for ing country is likely to increase, Tunisia can also both sending and receiving countries (World Bank, enhance the economic benefits from immigrants 2023). Although the enforcement of these agree- while maintaining their well-being and rights. ments requires ongoing efforts on both sending and Establishing legal pathways for workers in demand, receiving sides, The Philippines, which entered into 54 including lower-skilled workers, would be important bilateral labor agreements since the 1970s, managed to maximize the benefits of immigration for Tunisia. to provide better conditions for emigrants including This may be best done with the involvement of mul- the abolishment of placement fees in Gulf countries tiple stakeholders, including the private sector and and the establishment of a minimum wage, broader origin countries. The experience of destination coun- reforms to better equip workers with technical skills tries that have adopted policies aimed at attract- and knowledge, lower costs for sending remittances, ing needed migrants may help in this respect which business training and loans to returning migrants.32 include employment rights and residency privileges While Tunisia has signed a number of bilat- comparable to those of nationals. For instance, Aus- eral labor mobility agreements, these schemes tria, Germany, Portugal, Sweden, and the United Arab could be expanded to better align with the size Emirates have established job search visas according of the migrant pool and the needs in destination to which foreign workers who meet specific criteria countries. According to the Arab Barometer survey, are allowed entry for the purpose of finding employ- nearly 45 percent of Tunisians (around 5 million indi- ment. At the same time, most EU countries also adopt viduals) considered emigrating in 2021. The largest temporary schemes to fulfill labor demands across and oldest bilateral scheme in Tunisia—the Tunisian- the skills spectrum. For example, Spain and Morocco French agreement signed in 2008—includes about signed a bilateral agreement in 2001 that allowed 9,000 spots each year for workers with competences and skills that are not met in the French labor market.33 At the same time almost 90 percent of French firms 32 World Bank. 2023. World Development Report 2023: face difficulties in filling existing vacancies, and one Migrants, Refugees, and Societies. Washington, DC: third of those has unfilled vacancies for over a year.34 World Bank. The recently signed Talent Partnership between the 33 These workers are granted circulation visas and access EU and Tunisia could help expand and strengthen to the French labor market. Source: Direction Général du Placement à l’Etranger et de la Main d’Oeuvre Etrangère. such bilateral schemes. Ministère de l’Emploi et de la Formation Professionnelle To enhance their effectiveness, Tunisia Ministère de l’Emploi et de la Formation Professionnelle could consider tailoring labor agreements with 34 Ladepeche (2023) « DOSSIER. Emploi : la France host countries facing labor shortages or rising confrontée à la pénurie de main-d’œuvre », 30 May 2023. labor demand. Tunisia and partner destination coun- 35 Details on the programme can be found at https://www. tries can rely on lessons learned from previous expe- arbeitsagentur.de/vor-ort/datei/triple-win-factsheet- englisch_ba066707.pdf riences, including the skill partnership for the mobility 36 Triandafyllidou, A., Bartolini, L. and C.F. Guidi (2019) of nurses that has been in place between Germany Exploring the Links Between Enhancing Regular and Tunisia since 2013.35 Key aspects to consider for Pathways and Discouraging Irregular Migration, IOM: the working efficiency of such programs have been Geneva. 24 TUNISIA ECONOMIC MONITOR – MIGRATION AMID A CHALLENGING ECONOMIC CONTEXT Moroccans to work in Spain’s agriculture sector for make it easier for foreign workers that are in demand, up to nine months a year. This visa can serve as a such as in construction, agriculture and domestic ser- “trial period” before migrants apply for permanent sta- vices, to access the formal labor market. Ensuring tus. These schemes include employment rights and migrants have formal status is key to put their quali- residency privileges comparable to those of nationals. fications and skills to use in the local economy while Tunisia can take example and adopt similar policies to facilitating their inclusion. Making migration an engine of growth and development for Tunisia 25 1818 H Street, NW Washington, DC 20433