Chapter 1

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TABLE 5.1 Poky otfecdt Short term Medium term (one to two years) (one to five years) Trade libelIzation * A tariF system that promotes competition and * Replace QRs with tariffs, eliminate surcharges. * Follow schedule and complete reform over the efficient resource albcation as an engine of growth. * Replace import certificates with automatic next 5-8 years to obtain a low, uniform rate infrmration transfer to Statistical Office (INS). * Consolidate the tariff rates and reduce the number of exonerating regimes. * announce a timetable for tariff reductions applicable to all trade partners; begin to reduce structure. Forein investment liberalhation tariffs on heavily protected sectors in the first year. * Higher levels of FDI facitate access to * Increase automaticity in granting approvals, * Ensure level playing field between offshore and technology, improve management, strengthen facilitate procedures. onshore companies by reducing offshore fiscal tax domestic competition, provide financing, diversify * Open new areas up to bcal and foreign incentives. the risk strucure, and promote growth. investors: increase number of acivities allowing P Provide excellent infrastructure and trade * Closer integration of foreign investment myority foreign share, such as commercial banking, services to attract FDI, promote competitiveness: (offshore activities) to increase domestic value- telecommunications, insurance companies, assess results. added contribution. Privatzation transportation, infom-tabon technology, computer services, and luxury tourism. * Remove any restrictions on technical licensing. * Demonstrate Govemment commitment to a * Consolidated public sector accounts. * Promote privatization with infomiation private-sector-based strategy as a central element * Identify PEs (those directly owned by state and campaigns and discussion of results. of structural reform in order to promote higher those indirectly owned): assess financial productivity in a competive environment. performance. * Announce program, timetables, objectives: decide on a management strategy, such as management centralized under a high-level group and implementation decentralized. Freedom of entry * Remove public sector distibutbon, importlexport * Prepare medium-term strategy for * Promote compeition by opening up monopolies. infrastructure competiveness upgrading with opportunities to private sector in areas previously * Prepare legal reforms opening time-bound goals and monitor results. reserved for public sector, such as production, telecommunicatons: transport (shipping, air): port * Expand private sector in education, vocational services, and distribution. services to private sector; expand private subcontrading for O&M. * Complete accreditaton and supervision policies to promote private establishment of universities, health, and agricuitural services. training, healthcare, and agricultural services. Environment * Adopt a "polluter pays" prindple: strengthen local * Prepare strategy for sectoral adjustments * Growth and development objectives well capacity to monitor and enforce: promote (agriculture, tourism), phasing in price and policy integrated with sound environmental management community-based actions. changes: strengthen meteorological services and and the sustainable use of natural resources. * Ensure development plans assess economic predicion capabilities. costs and benefits with longer-term horizon. * Implement demand management for water * Regulate tourism industry, coastal degradation, water and sanitation limitations. assess intematbonal experience with water markets. 56 TuNIsiXs GLoBAL INTEGRATION AND SUSTAINABLE DEVELoPMENT. STRATEGIC CHOICES FOR THE 2 1ST CENrURY
TABLE 5.2 Compnmentary refonns Policy objectives Short term Medium term (one to two years) (one to frve years) Macroeconomic policies Monetary policy * Full liberalization of interest rates to a market- * Eliminate all preferential rates. * Continue improving the deposit bases of the driven yield curve. * Remove requirements to lend to priority sectors; public sector banks in proportion to their credits. * Ensure that commercial banks compete based permit high quality paper (T-bills under two years) to on interest rates and portfolio quality. be admissible at the appel d'offres. * Monetary expansion with system-wide, open- * Discourage the accord de place. market operations of treasury bills whereby banks * Remove resUictions in clearance and settlement meet their specific liquidity needs in the system procedures for securities; CBT refinancing on a through the secondary market. system-wide basis. P Prepare a monetary programming framework for Balance of payments exchange rate the formal estimation of the demand for money. * Strengthen external posion, prepare for full Strengthen the interbank foreign exchange * Full convertibility. convertbility. Real exchange rate, as a relative market. * Implement phased tariff reductions over eight price, must be albwed to react to changing * Encourage competibon, stimulate flexibility of years with complementary privatzation and market condibions. wages and relaive prices, induce higher regulatory reformis. * Achieve stronger, sodally eficient, sustainable public/private savings, promote diversificabon. extemal position. fiscal policy * Rather than relying on trade restrictions, demonstrate commitment to domestic, intemational competibon. * Remove NTBs. * A dedining, market-financed central * Monitor the govemment deficit, induding central * Prepare annual consolidated budget of revenues govemment defcit to ensure long-run and lcal govemments, social security, non-financial and expenditures. macroeconomic stability. PEs and financial PEs (banks). * VAT consolidated at singie rate (I7 percent). * Ensure a reliable revenue base to compensate * Generalize VAT. Overvalued VAT rate eliminated; Reduce fiscal advantages in Unified Inv. Code. for reductons in trade taxes and to maintain revise products subject to 6 percent rate; reduce * Implement tariff reducton schedule over next overall stability of fiscal position. exempbons; and eliminate suspensive schemes. 5-8 years. * Transparent and effective tariff protecton * Consolidate tariff rates, reduce exonerating system that is dear and easy to administer, regimes. promotes competition and the intemational * Replace QRs with tariffs; prepare a more integration of the Tunisian economy. compressed tariff reduction schedule than agreed under EU free trade agreement, applied to all trade partners. CHALENGES OF GLOBALIZAnON 57
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Public Disclosure Authorized Public
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Copyright i 1996 The International
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Education policies 20 Basic educati
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2.4 Demand for telephone connection
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Acknowledgments The report is a pro
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STIL Soci&e Tunisienne d'Industrial
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Executive summary Elements of Tunis
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ments and controlling the expansion
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Progress in strengthening market fo
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investment banking, restructure som
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Chapter 1 Macroeconomic policy The
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Box .I Monetary policy Instruments,
Page 27 and 28: TALE 1.3 Main monetary Indicators 1
Page 29 and 30: national markets and ensure the sus
Page 31 and 32: domestic production, and inducing a
Page 33 and 34: was actually higher than that for t
Page 35: public banks and enterprises reveal
Page 38 and 39: (10 percent), and Malaysia (12 perc
Page 40 and 41: Infrastructure services: Provision
Page 42 and 43: on a pilot basis and is studying th
Page 44 and 45: or in the public sector. The Bank i
Page 46 and 47: onmental issues and their relation
Page 48 and 49: several industrial zones. Despite t
Page 50 and 51: vocational education more relevant
Page 52 and 53: also showed high effective rates of
Page 54 and 55: try an opportunity to accelerate a
Page 56 and 57: BOX 3.2 Free trade zones: Maximizin
Page 58 and 59: largest share of total employment (
Page 60 and 61: encouraging results and provides us
Page 62 and 63: ill market and to modernize the leg
Page 64 and 65: price/earnings ratio of about 25 in
Page 66 and 67: achieve their intended objectives i
Page 68 and 69: TABLE 4.2 crisis brought about an 7
Page 70 and 71: costly process of adjustment, the a
Page 72 and 73: ented economy The growth of exports
Page 74 and 75: as a whole, but the related transit
Page 76 and 77: Land degradation and water scarcity
Page 80 and 81: TABLE 5.2 Complementary reforms (co
Page 82 and 83: IMF (International Monetasy Fund).
Page 84 and 85: Statistical Annex TABLE SA. I Exter
Page 86 and 87: TABLE SA.3 Public sector accounts,
Page 88 and 89: TABLE Sk6 GNP, output, and governme
Page 90 and 91: TABLE SA.8 Money, credit, prices, a
Page 92 and 93: TABLE SA IO Key economic variables,
Page 96: __s~~~~0 I _ 1 , h 5 .*-~. 5~~~ i -
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Chapter 1

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