ECONOMIC COSTS OF THE ARAB SPRING
In the wake of the revolution, investment sharply declined in almost all sectors, except the electronics sector, which saw uninterrupted growth (APII 2012). FDI flows decreased by 29.2 per cent during 2011 compared to 2010. Consequently, 182 foreign firms closed their doors (sixty-four Italian firms, sixty-one French firms, ten German firms) leading to the loss of 10,930 jobs. The decline of FDI was particularly severe in the tourism sector where losses were estimated at 83.3 per cent, while manufacturing and energy exhibited losses amounting to 42.4 per cent and 19 per cent, respectively.
The government took steps to limit losses in affected firms. Some of these measures included:
- • reduction in firms' contributions to social security by 50 per cent
- • reduction or even abolition of firms' tax dues for 2011
- • reduction in credit fees by two points.
The government adopted an economic and social enhancement plan (FIPA 2012), through which more investment is devoted to less developed regions. The plan provided more incentives for investment through the Tunisian financial market, allowed totally exporting firms to operate in the local market, and facilitated firm level access to liquidity.
ECONOMIC RECOVERY, 2012
FDI flows recovered by as much as 44 per cent, from 775.3 MTD during the first half of 2011 to 1,121.2 MTD in the first half of 2012. Compared to the same period in 2010, FDI amounts rebounded to 1,090.6 MTD, surpassing 2010 levels by about 2.8 per cent (APII 2012). During the first few months of 2012, seventy-one foreign firms were created giving rise to 6,731 new jobs. FDI was mainly concentrated in energy and manufacturing sectors (APII 2012).