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  • PROMOTING INCLUSIVE GROWTH IN ARAB COUNTRIESRURAL AND REGIONAL DEVELOPMENT AND INEQUALITY IN TUNISIA

    Mongi Boughzala Mohamed Tlili Hamdi

    GLOBAL ECONOMY & DEVELOPMENT

    WORKING PAPER 71 | FEBRUARY 2014

    Global Economyand Developmentat BROOKINGS

  • Global Economyand Developmentat BROOKINGS

  • Mongi Boughzala is a professor of economics at the

    University of Tunis El Manar.

    Mohamed Tlili Hamdi is an associate professor of eco-

    nomics at the University of Sfax in Tunisia.

    Acknowledgements:

    We would like to thank all of those in Sidi Bouzid and Le Kef who provided us with precious data and information.

    We also thank Hafez Ghanem and Michael Rettig for their excellent comments on earlier versions of the paper.

    We also benefited from discussions with the people we met at the workshops on regional development organized

    by the GIZ in Sidi Bouzid and le Kef.

  • Abstract:

    Regional disparities and inequality between the rural and the urban areas in Tunisia have been persistently large

    and perceived as a big injustice. The main regions that did not receive an equitable share from the countrys eco-

    nomic growth, as compared to the coastal regions that are highly urbanized, are the predominantly rural western

    regions. Their youth often have to migrate to the cities to look for work and most of them end up with low-paying

    and frustrating jobs in the informal sector. The more educated among them face a very uncertain outlook and

    the highest rate of unemployment. This bias is strongest for female workers and university graduates living in

    the poor rural regions. The purpose of this paper is to study the underlying causes and factors of these dispari-

    ties and to discuss policies and measures that may allow these regions to benefit from faster and more inclusive

    growth.

    Regional disparities do not mean that Tunisias rural regions remain totally backwards or that nothing has been

    achieved in the poorer regions. Actually, over the previous five decades various governmental programs and

    projects were implemented in these regionsin particular in the area of education. But the government efforts in

    the western regions were much less substantive than they were in the rest of the country, and little was done to

    develop modern non-agricultural economic activities. Moreover, while the democratization of education was not

    successful in ensuring job growth, it was critical in raising the level of awareness about regional disparities and

    the urban/rural economic gap.

    Inadequate government investment is not the only factor responsible for Tunisias rural poverty. The scarcity of

    natural resources (mainly water), the distribution of land and the limited access to financial resources are among

    the other important structural economic constraints facing agricultural development.

    Two regions are studied in more detail, namely Sidi Bouzid in the midwest and Le Kef in the northwest. We also

    give an overview of best international practices and the literature on economic development, with a focus on the

    case of South Korea and Taiwan in order to draw relevant lessons.

    We argue that, while it is possible to boost productivity and income for the rural population in Tunisias poor

    regions, improving productivity in agriculture is part of the solution. However, it cannot ensure a decent liveli-

    hood for all of Tunisias rural population, in particular for the impoverished Tunisians that own small farms or

    are almost landless. Regional development requires major structural reforms and strategies and comprehensive

    government-initiated programs operated within a holistic framework that combines public and private interven-

    tions. In the case of some regions with limited resources, such as Sidi Bouzid, this will not be sufficient; inevitably,

    rural to urban exodus and migration to other regions will continue. Politically, this may be hard to accept and to

    include in political agendas.

  • CONTENTS

    Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

    Regional and Rural Development and Disparities in Tunisia: An Overview . . . . . . . . . . . . . . . . . . . . . 4

    Unequal Progress and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

    Income Inequality and Poverty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

    Development Challenges and Potential in Two Tunisian Rural Governorates: Le Kef and Sidi Bouzid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

    Sidi Bouzid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

    Fairly Effective Rural Development Programs and Forgotten Youth . . . . . . . . . . . . . . . . . . . . 12

    Natural Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

    Government Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

    Le Kef . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

    Population and Labor Force Capacities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

    Rural and Agricultural Development in Le Kef . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

    Development Institutions and the ODESYPANO Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

    Lessons from International Experiences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

    Alternative Policies and Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

    References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

    Endnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

    LIST OF TABLES

    Table 1: Tunisias Labor Force by Level of Education, 1966-2011 (% of total labor force) . . . . . . . . . 5

    Table 2: Tunisias Labor Force by Region and Level of Education, 2010 (Number of People) . . . . . . 5

    Table 3: Tunisias Labor Force by Region and Level of Education, 2010 (%) . . . . . . . . . . . . . . . . . . . . 5

    Table 4: Tunisians Access to Basic Infrastructure by Year (% total population) . . . . . . . . . . . . . . . . 6

    Table 5: Distribution of Industrial Activities by Region (enterprises with more than 10 employees) 6

    Table 6: Per Capita Consumption in Tunisia by Region, 2010 (2005 Tunisian dinars) . . . . . . . . . . . . 8

    Table 7: Per Capita Consumption in Tunisia by Region (2005 Tunisian dinars) . . . . . . . . . . . . . . . . . 8

    Table 8: Per Capita Consumption in Tunisia by Urban and Rural (2005 Tunisian dinars) . . . . . . . . . 9

    Table 9: Poverty Rate in Tunisia: By Location and Year (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

  • LIST OF FIGURES

    Figure 1: Geographic Concentration of Tunisias Employment Opportunities, 2010 . . . . . . . . . . . . . . 7

    Figure 2: Poverty Rate in Tunisia: By Region and Year (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

    Figure 3: Map of Sidi Bouzid Governorate, Tunisia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

    Figure 4: Distribution of Irrigated Land and Major Aquifers in Sidi Bouzid . . . . . . . . . . . . . . . . . . . . 16

    Figure 5: Map of Le Kef Governorate, Tunisia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

    Figure 6: Population Growth of Le Kef, 2007-2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

    Figure 7: D

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