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

• Encourage entrepreneurship: Traditionally, governments formulated policies to
encourage international investment. However, if both the public and private sectors
are not expanding or growing at a rate that results in significant increases in youth
employment, measures should be taken to encourage them to start their own
business. In order to foster small business and entrepreneurship there needs to be an
environment that is suitable for business of all sizes to grow.
o Impact investing: Over 57% of microfinance loans are made in rural areas. Yet
financial services for microenterprises do not reach regions with high
unemployment rates. The government should encourage and incentivize
MFIs to provide financial services to those living in regions with high
unemployment.
• Tax incentives: Provide tax incentives to set up manufacturing plants and
telecommunications operations in Tunisia. These incentives should be structured so
that they do not crowd out domestic investment.
• Professional training programs: Improve the focus and targeting of professional
training programs. Currently, the government of Tunisia spends about 1.5% of GDP
on vocational training programs for unskilled workers. These programs have cut the
rate of unemployment for graduates in economics, management, law and social
sciences by over fifty percent. These training programs should focus on both people
that might be fired from their jobs and first-time job seekers.
• Tackling corruption: Small businesses with fewer than 50 employees account for
half of all employers in Tunisia. Most of them provide fewer than five jobs that do
not require educated labor. In order for the small businesses community to grow and
thereby create jobs, the government needs to address the bureaucratic red tape
and corruption of the nation. Fostering transparent and effective institutions are
critical to the development and growth of small businesses.
Long-term
• Infrastructure development: The development of large infrastructure is
required in order to fully integrate and develop Tunisia. From the development
195