Chapter 1

Conclusions reforms, and take full advantage of the rapid progress
underway throughout the world. The relatively young pro-
Progress has been made in reorienting the government's file of its population and its closer integration with Europe
development strategy from one heavily dominated by the should facilitate the country's absorption of new technolostate
and government-owned enterprises, to one that gies and new methods of doing business, provided the
encourages more decentralization, local initiative, and a Government creates an environment that encourages comgreater
role for the private sector. The public sector's share petition and actively expands the role of the private sector
in total output and investment is slowly corning down. The in most aspects of economic activity6-from the traditional
Government has improved the efficiency of many state- competitive sectors to services including health, education,
owned enterprises and agencies and reduced capital transfers
to these enterprises, which is an important step in the
and inrastructure.
right direction. But the presence of the state in both pro- Infrastructure services: global integration, efficiency,
ductive, commercial, and service-oriented activities is still
significant. Recent studies show that even in spite of the
and dynamism
improved performance, ownership does matter. The global Quality ifrastructure services improve the country's forintegration
of trade and production requires enterprises to eign investment prospects and have a decisive impact on the
react quickly to intemational market signals. For a variety competitiveness and export performance of enterprises.
of reasons (political, economic, and social), PEs are gener- Tunisian authorities need to think carefully about how the
ally not profit maximizers, and they have more difficulty different components of the sector should develop in the
adapting to an open, competitive, and rapidly changing years ahead. Several economies in Asia are moving aggresenvironment.
sively to offer the best services: highly rated airline services;
Privatization and deregulation of public sector monopo- well-connected transport networks; the fastest and most
lies have not played as strong a role as they could have in the efficient port and cargo-handling facilities in the world; a
Government's restructuring and "competitiveness upgrad- wide range of wel-integrated financial services and; low
ing" efforts, which has slowed down the adjustment process cost, state-of-the-art information technology and telecomand
hindered a more rapid expansion of the private sector munications. In order for Tunisia to take advantage of the
in the economy. More concerted efforts are needed to refo- changes taking place in the global integration and provision
cus the role of government away from direct control and of services and to respond to increasing international comownership
to a role that enforces regulations, protects the petition, it needs to encourage:
public and the environment, and encourages profitable * Further deregulation and a more active role for local priactivities.
The benefits of selling public enterprises are vate and foreign investors for example, in such sectors as
increasingly well-documented in other countries-in both telecommunications, port handling, and maritime and air
absolute and relative terms (higher profitability, improved transport; and
productivity, higher quality, and more appropriate pricing of * Continued improvements in efficiency through approprigoods
and services). The deregulation and on-going privati- ate pricing policies and a larger role for private companies
zation in the merchandise transport sector in Tunisia also
support these findings. It would be useful for Tunisian
in O&M.
authorities responsible for the country's privatization program
to prepare similar case study evaluations in order to
Social services: quality, access, and flnancing
enhance the discussion and increase the understanding of Reducing some state activities and increasing the private
deregulatior/privatization measures in Tunisia. provision of selected services in health care and higher level
Tunisia is in the fortunate position of being able to build education should help to maintain (and in some areas
on its strengths under conditions of relative prosperity, sta- improve) quality and link the cost of services more closely
bility, and the absence of severe environmental degradation. with the ability to pay. By ensuring the sound financial man-
At the same time, it cannot afford to be complacent in mov- agement of the health care system, achieving higher univering
forward, to deepen and accelerate the pace of its sal literacy and numeracy, and making secondary, higher and
RoLE oF TBE STATE IN THE ECONOMY 27