Chapter 1

TABLE 4.2 crisis brought about an 7.6 percent real GDP growth rate in
Sectoral share In GDP at market price 1992, led by an impressive 24.1 percent growth rate in the
(Percent) tourism sector. The vulnerability of the Tunisian economy to
198346 1987-94 external conditions will be minimized as the structure of
Agriculture and flshing 13.85 14.68 production becomes more diversified and domestic relative
Agriculture 13.16 13.92 prices (which still face some controls) and wages (which,
Fishing 0.69 0.60
Industry 32.31 29.23 given the current labor legislation, are rather rigid) become
Industry, excluding fuel 20.23 23.03 sufficiently flexible to accommodate sectoral demand and
Manufacturing 14.97 16.77
Agroindustry 3.90 3.64 supply shifts.
Construction maerials
Machinery
2.02
2.45
1.89
2.36 Structural reforms and growth
Chemicals 1.03 1.58
Textiles 3.64 5.06
Other 1.94 2.25 By the mid-1980s, a series of professional journal articles
Nonmanufactunng
Mining,aeturing u17.1
Minig, exduding fuel
Fuel
17.34
I .10
8.67
12.47
0.89
0.89
5.52
revived the academic interest in economic growth as a subject
for both theoretical and empirical research. Although
Gas and electrcity 1.44 1.42 this subject has always been of prime interest to policy mak-
Water
Construction
0.73
5.40
0.62
4.00 ers, the "new growth literature" is giving them a fresh and
Total services 44.17 46.83 more accurate perspective on the kinds of policies and
Transport and communication
Tourism (hotel, cafe)
6.39
4.40
7.23
5.24 reforms that best promote economic growth.
Financial services 3.36 3.47
Commerce 8.28 8.79 The determinants of economic growth
Other 8.31 8.74
Govemment services 13.44 13.37
Adjustment factor 3.57 3.24 In their contributions to the new growth literature, promi-
GDP atfactor cost
Net indirect taxes
86.76
13.24
87.51
12.49 nent economists explai how long-run growth IS enhanced
GDP at market prices 100.00 100.00 by socioeconomic developments and government policies.
Source: Ministry of Economic Development. The following is a list of some of the most important contributions
to this literature. Paul Romer (1986, 1990) points
The Tunisian economy, however, was subjected to large out the importance of technological research and developfluctuations
mainly due to sudden changes in agricultural ment; Robert Lucas (1988) emphasizes the role of human
production (which in turn depended heavily on weather
conditions) and to a lesser extent due to shifts in external
capital formation; Robert Barro (1990) highlights the
demand for Tunisian goods and services, particularly FIGURE 4.1
tourism (figure 4.1). The effect of weather conditions on
output growth is clearly seen in 1988, when a severe drought
caused agricultural output to decrease by 30 percent, which
Standard deviation
1983-94
of the annual growth rate,
Percent
in turn led real GDP to virtually zero growth. In 1990, when 8
weather conditions markedly improved, agricultural pro- 6
duction and real GDP grew strongly (by 32.2 percent and 1 4
7.3 percent, respectively). Agricultural production will 1 2
remain strongly dependent on weather conditions as long as a 0
irrigated agriculture covers only a small fraction of arable 6
land (currently 6 percent). By affecting the demand for 4
Tunisian exports, the Gulf crisis was also an important cause 2
of output variability during the early 1990s; after a fall in the Aiure Manu(aunng Servediudg Tiprkc GDPatre
real GDP growth rate to 4.1 percent and a contraction of EPIC
the tourism sector by 15.2 percent in 1991, the end of the Soure: World Bank caculations; data from Ministry of Economic Development.
46 TUNisIS GLOaAL INTEGRAnON AND SUSTAINABLE DEVELOPMENT' STRATEGIC CHOICES FOR THE 21ST CENTURY