The 1990s: Global Competition

Tunisian authorities played a crucial role in influencing the private sector to cope with increased competition in global markets. A legislative framework encouraged foreign investment, while privatization measures facilitated deepening integration into European markets (UNIDO 2001). The government encouraged modernization of the industrial sector through the Programme de mise a niveau launched in 1996 and the PMI that subsequently followed. The government created several trade initiatives with a view to establishing an FTA with the EU to improve the manufacturing sector's productivity and to increase the export share of manufacturing products. Trade remained protectionist throughout the 1980s and the first half of the 1990s. Since 1996, however, the government has gradually liberalized trade in manufacturing. Economic policies in the 1990s contributed to a steady decline in capital. During the same period, labour productivity gains became important sources of growth—real GDP grew faster than in the previous period.