Tunisia: Understanding Conflict 2012 - Johns Hopkins School of ...

of its revolution. This has had a considerable impact on Tunisia’s ability to attract foreign
direct investment and on its tourism sector. Given the substantial number of Tunisians
working in Libya, the Libyan crisis has also significantly affected the level of
remittances. Given this tough environment, the Tunisian government must make even
greater efforts to encourage economic growth and promote job creation.
Immediate Issues
Regarding the unemployment problem, there are three immediate issues facing the
Tunisian government: the lack of security, its current unproductive strategy of seeking
investment rather than foreign aid, and its failure to develop a comprehensive strategy for
reducing unemployment. The lack of security across the country is currently the greatest
hindrance to the growth of employment opportunities. Since January 2012, there has
been an upsurge in the number of strikes and protests in response to the government’s
lack of initiative on economic reforms. As a result, there have been significant
contractions in foreign investment and the tourism sector, both of which are critical
factors for employment generation in Tunisia. From 2010, foreign direct investment was
down approximately 30% and the income generated by tourism fell by 39%. However,
the government has not yet taken a proactive stance to bringing a halt these protests.
Closely linked to the security issue is the government’s current strategy for
stimulating economic growth by encouraging domestic and foreign investment. While
this strategy is a sustainable approach in the long term, it is currently unproductive
because of the poor security situation. Investment has been paralyzed since the
revolution, and it is not likely to revive in the near future due to continued instability.
Until the security situation improves, the government’s only alternative is to look to
donors to provide the funding necessary to stimulate the economy.
The United States and China are potential sources of major funding. The United
States has a strategic interest in stability in the MENA region, and if the democratic
experiments in the Arab Spring countries are successful, then the United States will find
itself with stronger allies in the region. Therefore, this rationale could be used to call
upon the United States to provide major reconstruction funding to Arab Spring countries.
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