GENEVA (ILO NEWS) – In “Tunisia: A New Social Contract for Fair and Equitable Growth”, a new report on the labour and economic situation in Tunisia, the International Labour Organization (ILO) has called for major investments in quality job creation, especially for the growing number of unemployed youth.

The report by the ILO’s International Institute for Labour Studies provides an in-depth analysis of Tunisia’s economy and labour market and calls for a series of measures to bolster the economy, create quality jobs, improve wages and promote equality and social protection.

In the past, even though the economy of Tunisia had been praised for its macroeconomic achievements and competitiveness, as well as the education system, the study says that economic growth was fundamentally inequitable.

“Despite high economic growth and a more educated workforce, the economy did not create enough jobs, which eventually proved unsustainable”, says Raymond Torres, Director of the Institute. The report adds that at around 30 percent, the youth unemployment rate in Tunisia was among the highest in the world, but was neglected on the grounds that economic growth was strong.

“The new political context represents a major opportunity to achieve inclusive growth and thus real prosperity”, Mr. Torres added. This entails addressing a number of structural weaknesses, including:

A major deficit in quality job creation: The labour force had grown from less than 3 million in 1994 to around 4 million in 2010. Between 2004 and 2007, 77.000 net new jobs were created, the majority of which were low-skilled.

A mismatch between jobs being created and the skills of the labour force: the unemployment rate for the college educated rose from 14 per cent in 2005 to close to 22 per cent in 2009, while it fell for those with no education during the same period.

Low private investment: Despite growing profit rates, investment was on a downward trend –between 1990 and 2007, private investment as a per cent of GDP declined by 1.2 percentage points. Tunisia was one of only three countries in the MENA region (with Algeria and Egypt) that witnessed a decline in investment as a percentage of GDP during that period.

Low wages: Between 2004 and 2007, real wages grew by a mere 2 per cent average annual growth, which is less than average annual productivity growth of close to 3 per cent in the same period.

High emigration: It is estimated that the number of qualified Tunisian workers in Europe doubled in the 1990’s, a trend that continued in the 2000’s. High emigration historically relieved some of the labour market pressures in the country, but the global crisis made access to foreign job markets more difficult, further increasing internal social tensions,

Persistent gender inequality: Despite improved education, women’s employment participation rate in 2010 was just 24.8 per cent compared to 69.5 per cent for men; while the rate of unemployment for women in 2010 was 19 percent compared to 11 per cent for men.

Social protection gaps: for instance, the percentage of the unemployed receiving unemployment benefits was just 3 per cent in 2008, the equivalent of only 13,000 people.

Looking towards the future, the report says that “a number of policies have been enacted by the new authorities (…), particularly with respect to youth unemployment”, but adds that the momentum could be used to tackle the shortcomings in the labour market and improve national dialogue on the key issues.

The issues were discussed during a one day study event in Tunisia on September 28^th organized by the National Institute of Labour and Social Studies (INTES) in collaboration with the Tunisian Association of Social Law (ATDS), and the Association of Alumni of the National Institute of Labour and Social Studies. Among the additional measures called for at the event were the need to break from the old patterns of development by encouraging broader based private investment and stronger and more sustainable job creation through innovative policies that move the country up the technological scale and take into consideration Tunisia’s skilled labour force. There was also support for the need to improve the efficiency and solvency of the social protection system and promoting dialogue among employers and workers on wages, worker rights and the investment climate.

“As Tunisia moves forward, there is a unique opportunity for a new socio-economic strategy which improves job and investment opportunities for all, thus paving the way for sustainable growth”, Mr. Torres said.

For further information, please contact the ILO Department of Communication and Public Information at communication@ilo.org or +41.22.799.79 12.