Natsuko Obayashi , African Development Bank (AfDB) Group , 2012

This report analyzes the background of the Tunisian revolution and the outstanding challenges ahead for policy-makers. The first section examines why the social contract under the former government became unsustainable and how increasing governance problems affected the country’s business environment and economic performance. The second section reviews the sources of social resentment. Namely, aggregate social indicators, which despite their strong performance, were inaccurate representations of the increasing poverty and inequality rates in the hinterland, and rising youth unemployment. The last section analyses the main structural challenges of the Tunisian economy and business environment. Each of the sections provides policy recommendations.

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