Hafez Ghanem, Vice-President for MENA, World Bank, on factors to promote faster and stronger economic growth

TN17_EV_World Bank_Ghanem.jpgHow can Tunisia create a more inclusive growth model?

GHANEM: Tunisia’s economic model has delivered positive outcomes and helped the country set up the building blocks of a healthy and productive economy. Yet, it has failed to include large segments of society, particularly youth, women and citizens from the interior regions. Achieving inclusive growth will require action on three fronts. First, education reform is very important to ensure that young people are prepared to seize economic opportunities and compete in a 21st-century marketplace. Tunisia, like other countries in the region, has greatly expanded access to education, which is commendable. However, the quality of education has not been improving alongside that access. There is a need to strengthen teaching of mathematics and sciences, and modify teaching methods to emphasise 21st-century skills like problem-solving, creativity and working in teams.

Second, improving the investment climate is a priority, and encouraging small and medium-sized enterprises to become an engine of growth and job creation. Putting Tunisia on a path to inclusive growth will require, among other things, an open business environment that encourages the emergence of a dynamic private sector. Leveling the economic playing field would promote the competition needed to generate growth and jobs. It will also prevent elite capture, thereby creating opportunities for the many rather than the few.

Third, Tunisia needs to modernise its social protection system. This means moving away from subsidies and putting in place a social protection system based on cash transfers that target those who really need them. This is the approach being used all over the world. It is the approach for the 21st century and, not only does it promote equity, but it is a much more efficient use of resources.  

To what extent is Tunisia working to expand the role of women in the labour force?

GHANEM: It is surprising to me that, given all the advances achieved by Tunisian women, their labour force participation rate is, at 20-25%, still so low. It is lower than in most countries of sub-Saharan Africa in spite of a very progressive legal framework and education system. Not only has Tunisia succeeded in achieving education parity, it has more women completing university than men. Yet we see that women are not participating in the labour force, and when they do participate, their unemployment rates are much higher than the rates for men – and their salaries and wages are much lower.

I think this is a problem for three reasons. The first reason, which is the obvious one, is that we are not using the capacities of all those women who have studied and completed university. The second, and probably most important reason, has to do with inclusion. One way economic inclusion is demonstrated is through the expansion of the middle class.  How do you expand the middle class?  Look at middle-class families in Britain, France or Japan: what do they all have in common? Those middle-class families have two adults working. You cannot create a middle class, nor increase inclusion, in societies where families have only one adult working. As such, societies will never be able to reach the same level of income and consumption as the countries whose families have two working adults. 

Lastly, another important factor is the participation of women in public life. In that area, Tunisia has some significant achievements, specifically in terms of the number of women now in Parliament. One-third of parliamentarians are women. This is important for social development in general, as I hope the presence and role of women in the political arena will eventually lead to the economic emancipation of women. This will be critical to ensuring faster and stronger growth in Tunisia and, equally important, more inclusive growth with a larger middle class.

 

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