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The ITCEQ calls for a renewal of the industrial policy in Tunisia


Written by Eric Apim on Friday, January 14th 2022 à 11:36 | Read 148 times



The new Tunisian industrial policy requires manufacturing exports with high technological content (photo: GIFAS)
The new Tunisian industrial policy requires manufacturing exports with high technological content (photo: GIFAS)
TUNISIA. A study by the Tunisian Institute of Competitiveness and Quantitative Studies (ITCEQ) in January 2022 stresses the importance of government intervention to develop industry in Tunisia. According to the authors of this 130-page document entitled "For a renewal of industrial policy in Tunisia - Requirements of competitive positioning " and coordinated by Souad Dhaoui, "industrial policy is one of the main levers of action allowing the public authorities to implement a structural policy that seeks to improve the bases and structures of the economy with the aim of improving the functioning of the latter, adapting it to the transformations of society to increase its potential growth and improve its integration and its position at the international level. And to insist, "the transformation of the structure of an economy is thus closely linked to the development of the manufacturing sector".

The non-administrative public institution under the supervision of the Tunisian Ministry of the Economy and Planning therefore highlights "the contribution of the manufacturing sector to GDP" and the need to "choose industrialisation as the central element of a development strategy", an option that has enabled advanced economies to progress.

The study agrees with the Organisation for Economic Co-operation and Development (OECD) that "the successful integration of an economy into international markets today depends as much on its ability to import good quality inputs (favouring the diffusion of foreign knowledge) as it does on its ability to export locally produced value-added contained in intermediate goods and services that can be integrated into the exports of other countries".

Industrial activities not sufficiently positioned in global value chains

Today, intermediate products represent an important and dynamic component of Tunisia's merchandise trade, accounting for nearly 30% of its manufactured goods exports and 37.6% of its imports in 2019. The ITCEQ also points out that the country "has been able to move upmarket, turning to manufacturing exports with a high technological content and intensive in skills, whose share in total exports rose from 2.7% in 2000 to 14% in 2017".

However, the study considers the positioning of industrial activities in global value chains (GVCs) to be "insufficient", especially downstream. Logistics also remains a "weak link" in Tunisian industry. The ITCEQ also stresses, while specifying that it exceeds that of some of its direct competitors (Morocco, Turkey, South Africa), that the share of value added generated by manufacturing exports in the GDP "reflects a still low dependence on industrial exports" (21.5% in 2016).

These observations are reinforced by the economic shock produced by the health crisis. It highlighted the vulnerability of MVCs and thus the dependence of the world's economies on Chinese and East Asian industries in strategic sectors such as medical equipment and products, but also the supply of intermediate goods (transport equipment, fine technology equipment, machinery and equipment, electronic components, pharmaceuticals, textiles). Hence the movement in Europe and North America to strengthen the resilience of supply chains and to invest in relocating the production of certain goods considered essential to the region. This disinvestment from distant or unstable areas to Euro-Mediterranean countries can only be beneficial for countries like Tunisia.

 

The ITCEQ study advocates an overhaul of Tunisian industrial policy (photo: ITCEQ)
The ITCEQ study advocates an overhaul of Tunisian industrial policy (photo: ITCEQ)

Strengthening competitiveness

Provided precisely to define "a clear vision and the development of an industrial strategy that trace the political and strategic directions of the country which are, today, essential to reposition the industry, strengthen its competitiveness and succeed in the dual transition, energy competitiveness and succeed in the dual transition, energy and digital," the study stresses.

According to ITECQ, this new industrialisation policy involves innovation and technology transfer, investment in strategic sectors and new niches of excellence, the promotion of industrial investment for an industry that is a source of sustainable growth, support for the competitiveness and growth of industrial companies and the promotion of industrial exports. Not forgetting cross-cutting policies and actions - such as improving the business climate, investing in major structuring projects and public facilities offering access to basic services for a better quality of life, orienting public enterprises towards performance, streamlining administrative procedures, supporting the industrialisation of the Regions, and accelerating the digital transition. These are all essential elements, variables controlled by the public authorities, to ensure the implementation of all the above points.

Read the full ITCEQ study "For a renewal of the industrial policy in Tunisia - Requirements of competitive positioning ."



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