Habib Essid, Head of Government: Interview

Interview: Habib Essid

What are the major reforms aimed at boosting the Tunisian economy and stimulating investment?

HABIB ESSID: First there is the fiscal reform, which may extend over several years. This is a reform of all texts relating to the fiscal regime and the use of the tax income to ensure the fair redistribution of wealth. The reform’s objectives include to fight against tax evasion and smuggling and to improve state revenues. A second major reform is of the banking system, with the objective of raising the performance of public institutions to the same level as private ones. A third crucial reform is the investment code, which must be revised in order to send a powerful signal to foreign investors by establishing a more business-friendly environment in Tunisia. A fourth important reform involves the social welfare system, which includes the pension fund and health insurance. Given the lack of financial resources at the social security pension fund, and with the budget deficit worsening, it is necessary to take emergency measures, like raising the retirement age from 60 to 65. The government is also working to improve compensation policies in the energy sector, the transport sector and the fast-moving consumer goods segment. The education system will also be modernised through reforms in general education, higher education and scientific research. To facilitate the implementation of these reforms, the Tunisian administration will be reformed as well.

Which sectors are being prioritised under the Complementary Finance Law?

ESSID: One important aspect of the law is to support small and medium-sized enterprises, which are the backbone of the economy and are really affected by the crisis in Libya, their historical business partner. Another important aspect is to promote exports, especially in key sectors such as agriculture and the food industry. From October 2015 to October 2017, the EU will allow Tunisia to export products to the EU with an annual quota instead of a monthly quota, and with the maximum amount raised from 56,000 tonnes to more than 80,000 tonnes. This measure is expected to help improve the competitiveness of Tunisian companies in EU markets.

What forms of regulation and control are being used to minimise the informal sector in Tunisia?

ESSID: The fiscal reform is an important element in this, as the new tax rate and lower Customs duties should help reduce the size of the informal market. In addition, some actions – like better control of commercial activities and the borders, especially those with Libya – must be implemented if we want to see a significant reduction in the informal sector. The use of police force is not enough to solve this problem; we must think about how to integrate whose who are working in the informal sector into the real economy.

How is the government acting to tackle terrorism and guarantee security for the country?

ESSID: Contrary to what has been done in the past, the current government is implementing an offensive strategy to fight terrorism with the purpose of forestalling and anticipating terrorist activities. The government is also taking preventive action through the arrest and close follow-up on people linked to terrorist groups. Financial and human resources have been deployed at the army and the interior security levels to secure the country’s territory, especially at the border with Libya. Moreover, a wider cooperation programme with “friendly countries” has been implemented. Tunisia is aware that another important tool to fight terrorism is prevention among youth. Some young people become terrorists through their beliefs, but for many it is because they do not have job opportunities or future prospects. Job creation and youth supervision are fundamental elements in preventing young people from being drawn into terrorist activity.