World Bank2012-03-192012-03-192010-01-01https://hdl.handle.net/10986/2955Tunisia must move from a low value-added and low cost economy to a higher value-added, knowledge intensive economy in order to significantly reduce unemployment, its overriding challenge. This Development Policy Review (DPR) provides a discussion of the key issues and challenges that are involved in achieving this goal. Towards this end, it discusses trade integration, innovation policies and enabling environment reforms (macro stability, economic regulation and governance, financial sector and labor market reforms and capital account opening) that could facilitate the structural transformation of the economy. The DPR is organized as follows: chapter one reviews growth and employment outcomes and challenges; chapter two discusses the rationale for increasing the pace of structural transformation of the economy in order to boost growth and reduce unemployment; chapter three examines the strengths and weaknesses of Tunisia's innovation system and strategies and proposes reform options in light of the international experience; chapter four discusses key aspects of Tunisia's global integration that could further contribute to innovation and productivity growth; chapters five discusses the key improvement in the enabling environment needed to support innovation and productivity growth (economic regulation, education sector reforms, financial sector reforms and labor market); finally, chapter six discusses structural transformation issues in natural resource-intensive sectors and examine the specific sectoral reforms needed to address the trade-offs between several objectives, including growth and natural resources preservation.CC BY 3.0 IGOACCOUNTINGACTIVE LABORACTIVE LABOR MARKETACTIVE LABOR MARKET POLICIESACTIVE LABOR MARKET POLICYAGE GROUPAGE GROUPSAGRICULTURAL SUBSIDIESAGRICULTUREANTI-COMPETITIVE PRACTICESAVERAGE UNEMPLOYMENTAVERAGE UNEMPLOYMENT RATEBANKING SYSTEMBARRIERS TO ENTRYBENCHMARKINGBORROWINGCAPITAL ACCOUNTCAPITAL ACCOUNT LIBERALIZATIONCAPITAL INVESTMENTCAPITAL MARKETCAPITAL USECENTRAL BANKCLIMATE CHANGECOMMERCIAL BANKSCOMPETITIVE PRESSURECOMPETITIVENESSCOMPLEX TASKCONSUMPTION SMOOTHINGCONTRACT ENFORCEMENTCURRENCYDEBTDEBT INSTRUMENTSDECENTRALIZATIONDEMOGRAPHIC TRANSITIONDEVELOPMENT POLICYDISMISSALDOMESTIC MARKETDRIVERSEARNINGECONOMETRIC ANALYSISECONOMIC ACTIVITYECONOMIC CRISESECONOMIC DEVELOPMENTECONOMIC EXPANSIONECONOMIC PERFORMANCEECONOMIC REGULATIONECONOMIC STRUCTUREEFFECTIVE USEELASTICITYEMPLOYMENT INFORMATIONEMPLOYMENT OUTCOMESEMPLOYMENT SITUATIONENABLING ENVIRONMENTENERGY EFFICIENCYENVIRONMENTALENVIRONMENTAL DEGRADATIONEQUIPMENTEQUIPMENTSEXCHANGE RATEEXCHANGE RATE FLUCTUATIONSEXOGENOUS SHOCKSEXPENDITUREEXPENDITURESEXPORT MARKETSEXPORTSEXTERNAL FINANCEEXTERNALITIESFINANCIAL CRISESFINANCIAL CRISISFINANCIAL INSTITUTIONSFINANCIAL SECTORFIRM LEVELFIRM SURVEYFIRM-LEVEL PRODUCTIVITYFISCAL DEFICITSFISCAL POLICIESFIXED COSTSFIXED INTERESTFIXED INTEREST RATEFLEXIBLE EXCHANGE RATEFOREIGN INVESTMENTFOREIGN INVESTORSFOREIGN PORTFOLIO INVESTMENTFREE TRADEFUND MANAGERSFUTURE LABORGDPGDP PER CAPITAGOVERNMENT SECURITIESGOVERNMENT SUPPORTGROSS DOMESTIC PRODUCTGROWTH RATEHIGH UNEMPLOYMENTHIGH UNEMPLOYMENT RATEHOUSEHOLD SURVEYHUMAN CAPITALINCOME GROWTHINFANT MORTALITYINFORMAL SECTORINNOVATIONINSTITUTIONAL INVESTORSINSURANCEINTELLECTUAL PROPERTYINTEREST PAYMENTSINTEREST RATEINTERNATIONAL STANDARDSINTERNATIONAL TRADEINVENTORYINVESTMENT BANKINVESTMENT FUNDJOB CREATIONJOB SEEKERSJOB VACANCYJOBSLABOR COSTLABOR DEMANDLABOR FORCELABOR MARKETLABOR MARKET OUTCOMESLABOR MARKET POLICIESLABOR MARKET POLICYLABOR MARKET REFORMSLABOR MOBILITYLABOR PRODUCTIVITYLABOR REGULATIONLABOR REGULATIONSLABOR SUPPLYLABOURLABOUR MARKETLAYOFFSLEGAL FRAMEWORKLIFE EXPECTANCYLINES OF CREDITLIQUIDITYLIVING CONDITIONSLOCAL CURRENCYMACROECONOMIC ENVIRONMENTMACROECONOMIC MANAGEMENTMACROECONOMIC STABILITYMANUFACTURING INDUSTRIESMARKET COMPETITIONMARKET DISCIPLINEMARKET PRICESMARKET REGULATORMATHEMATICSMINIMUM WAGEMONETARY FUNDMORAL HAZARDNATIONAL INCOMENATURAL RESOURCESNON-PERFORMING LOANSNPLOILOPEN ECONOMYPARTIAL PRIVATIZATIONPATENTSPER CAPITA INCOMEPER CAPITA INCOMESPOLICY MAKERSPOLICY RESPONSEPORTFOLIOPORTFOLIO INVESTMENTSPOTENTIAL INVESTORSPRICE FIXINGPRIMARY EDUCATIONPRIVATE FIRMSPRIVATE INVESTMENTPRIVATE INVESTORSPRIVATE SECTORPRODUCT MARKETPRODUCTION FUNCTIONSPRODUCTION PROCESSPRODUCTIVITY GAPPRODUCTIVITY GROWTHPROPERTY RIGHTPUBLIC DEBTPUBLIC FUNDPUBLIC GOODPUBLIC SERVICEPUBLIC SERVICESPUBLIC WORKSREAL GDPREGULATORY FRAMEWORKRESOURCE MANAGEMENTRETURNRISK SHARINGSAFETYSAFETY NETSALARIED EMPLOYMENTSALARIED WORKERSSEASONAL WORKERSSERVANTSSEVERANCE PAYSKILL UPGRADINGSKILLED LABORSKILLED WORKERSSTOCK MARKETSTRUCTURAL CHANGESURVIVAL RATETARIFF BARRIERSTARIFF REVENUESTAXTECHNICAL ASSISTANCETERMS OF TRADETOTAL EMPLOYMENTTOTAL FACTOR PRODUCTIVITYTOTAL FACTOR PRODUCTIVITY GROWTHTRADE LIBERALIZATIONTRADEOFFSTRADINGTRAINING CENTERSUNEMPLOYEDUNEMPLOYMENTUNEMPLOYMENT INSURANCEUNEMPLOYMENT RATEUNEMPLOYMENT RATESVALUE ADDEDVOCATIONAL TRAININGWAGE EARNERWAGESWORKERYOUTH LABORWorld Bank10.1596/2955