Hope and Perseverance on Tunisia's Demanding Road Ahead
IMF Blog, February 2, 2012
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Bibliographic details
- Authors: Christine Lagarde
- Published: February 2, 2012
Context and visit
- Author: Christine Lagarde
- Date: February 2, 2012
- Purpose: Official visit to Tunisia; meetings with new leaders, CEOs, banking representatives, and civil-society actors including women entrepreneurs, professors, and youth activists.
- Tunisia characterized as "the spark that ignited the Arab Spring" and as undergoing an "inclusive process of transition" to democracy and prosperity.
Main economic challenges identified
- Deteriorating public finances.
- A widening current account deficit.
- Lingering problems in the banking sector.
- Widespread anxiety about the cost of living and trade.
- External pressure from "the looming debt crisis in the Euro zone."
- Financing gap for stabilizing the economy:
- Capital markets expected to provide only a small part of needed funds, and at a higher cost.
- Need for support from regional partners and the broader international community.
- The IMF states it is "ready to do its part."
Labor market and social concerns
- Unemployment estimated at 18 percent.
- Youth unemployment at over 40 percent.
- Emphasis that economic development is a means to enrich peoples’ lives, with gainful employment providing dignity, mobility, and hope.
- Call for harmonized action by government and private sector to boost investment, productivity, and create jobs.
Immediate policy priorities and recommendations
- Ensure social cohesion while maintaining macroeconomic stability over the coming year.
- Secure adequate financing as a top priority, drawing on:
- Capital markets (limited and costly).
- Regional partners and the international community.
- Support from multilateral institutions, including the IMF.
- Address chronic joblessness, especially among youth, through policies that stimulate investment and productivity and foster job creation.
Outlook and concluding observations
- Acknowledgment that transitional periods bring "unease and impatience" amplified by global economic turbulence.
- Perspective: "The road ahead will be long and demanding," but the author expresses hope in Tunisia's ability to succeed.
- Cultural and human note: Tribute to Tunisia's diversity and resilience, with imagery of "magnificent ceramics," mosaics, and the strength of Tunisian women friends.
Source: "Hope and Perseverance on Tunisia's Demanding Road Ahead" — Christine Lagarde, February 2, 2012.
