Since the early 2000s, the investment rate has declined, driven by the decrease in business investment. Its level is low compared to some other emerging countries. The main factors are: excessive product market regulations, associated with complex administrative procedures, unpredictable taxation, increasing difficulties for the passage of goods through customs and their maritime transport, and a financial system that is unfavourable to young companies and fast-growing ones. Removing these constraints is essential to boost business investment and, with it, productivity, job creation, competitiveness and the purchasing power of all Tunisians. The new Investment Law, by simplifying the licensing regime, is a step in the right direction but will need to be fully implemented and accompanied by further reforms. It would also be desirable to better target government actions to support investment, including a systematic evaluation of the impact and beneficiaries of tax incentives, particularly those for housing. At the same time, there is a need to better manage existing infrastructure and prioritize infrastructure projects.

The average standard of living of the Tunisians has been steadily increasing for several decades, while poverty and inequality have been greatly reduced by the implementation of many social programs. Access to basic infrastructure such as drinking water or electricity has also been developed. However, the employment rate remains low, especially for women; about a third of young people are unemployed and informal work is widespread. There is an urgent need to promote training that meet the employers’ needs and to encourage women employment. The reduction of social security contributions on salaried employment will allow the creation of quality jobs. The implementation of the financial inclusion strategy will facilitate access to finance. Regional disparities in terms of unemployment and standard of living between coastal and inland regions are important. A new regional development policy, emphasising the specific assets of each region around the development of urban centers, is needed. The 2014 Constitution, which provides for increased autonomy and power of local authorities, represents an opportunity to achieve this goal.