The EU helped modernize Tunisian public sector

In 1995, Tunisia was the first Arab Mediterranean country to reach an Association Agreement with the EU. Yet, even though Tunisian goods, capital and services can freely circulate between the two shores of the Mediterranean, free movement of people… remains a serious issue.

Samira Sadfi - Tunis, Al Hayat

After cooperative-based policies were cancelled by Tunisian authorities in the late 1960s and replaced by competition-based economy, Tunisia succeeded in allowing its opening up to the outside world, especially to Europe. Except that the weakness of local capitalization and the drawback of industrial expertise made of the European assistance an economic and technical necessity.

In fact, partnership and cooperation between the European Union and Tunisia began in the 1970s. In 1995, Tunisia was the first Arab Mediterranean country to reach an Association Agreement with the EU.

Among the EU assistance programmes to Tunisia, support to the modernization of industries took a foremost place. More than 1000 local factories have received international standards certificates and the EU has contributed to this goal. The EU also helped Tunisian enterprises in restructuring their financial system, and promoting international trade through the reduction of tariff and non-tariff barriers.

Plan for industrial modernization
The first EU-funded project was called “Plan for industrial modernization”. Odoardo Como, who was in charge of the support to the private sector at the EU Delegation in Tunis said in an interview with Al-Hayat that “the EU helped in implementing three Tunisian plans: bending and training, improving quality, and creating new units”. He added that the EU assisted Tunisia in defining its long-term development strategy until 2016.

In the same context, EU assistance to Tunisia resulted in promoting credit supply (on one hand, via creating new funding sources and financial instruments, and, on the other hand, reinforcing and restructuring the Tunisian Guarantee Society) to stimulate private investment. This has undertaken the allocation of credits to entrepreneurs in industrial and service sectors, providing new employment opportunities for fresh graduates. According to Mr. Como, the EU worked in collaboration with Tunisian authorities on identifying private sector's needs, in order to plan out an efficient assistance strategy.

Support to the public sector
Recently, EU has given support to the public sector through four projects (Structural adjustment facilities or classic project type), some of which are still being implemented. One aimed at restructuring the financial sector, the second one was designed to support the privatization of public institutions. The third project is meant to ease paperwork that should be done by private institutions when it comes to administrative public services. Finally, the objective behind the forth project is to initiate the removal of custom barriers, in order to liberalize trade operations, especially for imports.

This cooperation has fostered the development of the industrial sector, which succeeded in standing up Tunisian products to the competition of European products. This followed the liberalization of trade between Tunisia and the EU member states last year, in accordance with the implementation of the Association Agreement.

In addition, the EU helped in the development of modern public institutions, especially through twinning projects between Tunisian organizations and their counterparts in the EU member states. For example, the National Institute for Standardization and Industrial Property (INNORPI) benefited from a twinning project implemented with a French institution. Through this type of collaboration, the European party provided technical assistance to Tunisian institutions and their staff according to European know-how.

Both Tunisian and European parties endeavoured to speed up cooperation. In fact, they are obliged to complete negotiations about liberalizing trade of goods by the end of this year. While another important deadline was also set: next year is scheduled to witness the liberalization of trade in services. On March 27th 2008, only few months after joining the Euro-Mediterranean Free Trade Area for manufactured products, Tunisia began negotiations about liberalization of trade in services.

The dissatisfaction of industrials
Last may, during a seminar organized in collaboration with the EU Delegation in Tunisia, industrials seized the opportunity to criticize the cooperation process between the EU and Tunisia. Some mentioned the issue of free circulation of people, describing it as a necessity for “strengthening balanced partnership”. From its part, the European party insisted on linking free movement of people to strict terms and conditions.

The EU ambassador in Tunisia, Mr. Adrianus Koetsenruijter, said that quickening negotiations about the liberalization of exchange of services, and reaching an agreement within the deadline agreed, will certainly give advantages to Tunisia compared with other Southern Mediterranean countries. He also explained that Tunisians have expressed their desire to come to an agreement encompassing all sorts of service providers, including individual professionals. This, he said, “is an aspect that was not taken into account in similar agreements signed between the EU and other partners”.

On the basis of this privilege, if granted, there will be a mutual endorsement of diplomas and work certificates. Experts’ exchanges will also be eased.

However, European participants expressed a deep concern about the repercussions of free circulation of people on the immigration issue. They explained that, with the present financial crisis and the increased unemployment rates in the EU member countries, it seems difficult, at the moment, to come up to Tunisian expectations in the field of free circulation of persons. European participants also suggested a pragmatic approach by sectors, arguing that the local service sector still has an unexploited potential that could benefit European enterprises.

According to Europeans, the Tunisian service sector, including tourism, healthcare, accounting, financial engineering, information and communication technology, seems to be very attractive to European institutions, thanks to its high quality and large development capacities. Consequently, this sector would most probably acquire a significant part of the new “National Indicative Programme (NIP)” between Tunisia and the European Union (2011-2013), which will focus on the competitiveness of Tunisian enterprises and their opening up to the European markets. But Europeans seem to be insisting at including all dimensions in the negotiations about the liberalization of services, such as small and medium local enterprises, independent civil society organizations, inspection services, the pricing system, the legal framework, and other levels.

N.B: Text translated from Arabic by Eurojar team