Suchergebnisse

Tunisia's reforms and agile shift to a more democratic political system since a major political revolution in 2011 has not prevented continued and rising citizen discontent. While this paper does not directly analyze this vexing problem, it assesses welfare indicators and labor markets nationally, regionally, and across different population groups—such as women and youth—over the last two decades. The paper shows that while Tunisia has significantly reduced poverty between 2000 and 2019, the profile of the poor has not changed much: poverty remains concentrated in rural and western regions, mainly among households with younger men without education and headed by someone working in low-productivity sectors such as agriculture and construction. Moreover, the share of the vulnerable Tunisian population at risk of falling into poverty is quite large, especially after the COVID-19 pandemic, even though poverty had been declining over the past two decades. Non-monetary dimensions of well-being, such as access to basic services, are also unevenly distributed across regions and population groups. COVID-19 has further aggravated these disparities and is reversing Tunisia's poverty reduction gains. The paper sheds light into the issues that require policy attention on poverty.

Tunisian social development policy making has always counted on energy subsidies to play a pivotal role. Due to the increasingly unsustainable budget implications, a new strategy has begun to reform the subsidy system in the energy sector while striking a balance between improving fiscal and equity considerations without increasing social tensions. This paper presents an analysis of the fiscal and distributive consequences of the changes to the subsidy setup announced by the government at the end of 2014. The results show that raising electricity prices for consumers and removing subsidies for other energy sources would lead to a short-term increase in the poverty rate of 2.5 percentage points. In addition, compensation mechanisms that could be readily implemented (such as universal coverage or building on the existing health cards system) will not bring substantive counterweight to the increased poverty, even if all savings of reforms could be perfectly channeled as cash transfers. The analysis suggests that bold reforms of energy subsidies need to be accompanied by equally bold improvements to the targeting schemes of public spending if poverty and disparities are to be substantively reduced.

COVID-19 is likely to have a large impact on the welfare of Tunisian households. First, some individuals might be more vulnerable to contracting the disease because their living conditions or jobs make them more susceptible to meeting others or practicing social distancing. Lack of adequate access to health insurance, overcrowded living conditions, and low access to water at home are reasons that make the Tunisian poor more susceptible to getting infected or not being able to seek health care in the event that they contract COVID-19. In addition, the elderly in the poorest households could be more susceptible to COVID-19 due to higher prevalence of intergenerational households among the poor. Second, many sectors of the labor market have experienced an economic slowdown, and those employed in these sectors are likely to experience disproportionate effects. Combining the labor shock and price shock simultaneously, the simulations in this paper show an increase in poverty of 7.3 percentage points under a more optimistic scenario and 11.9 percentage points under the pessimistic scenario, and individuals in sectors such as tourism and construction are expected to fall into poverty due to COVID-19. The paper estimates that the government's compensatory measures targeted toward the hardest hit are expected to mitigate the increase in poverty. Specifically, the increase in poverty will be 6.5 percentage points under the optimistic scenario if mitigation measures are in place vis-à-vis in their absence, when the increase in poverty is 7.3 percentage points.