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Growth and Technology in Tunisia : What are the prospects for 2008?

January 17, 2008

January 2008 - The last edition of Global Economic Prospects 2008, subtitled Technology Diffusion in the Developing World, examines over the near and longer term, it takes an in-depth look at the current level of and recent trends in technological achievement.

Economic prospects for the Middle East and North Africa (MENA) region and Tunisia

GDP in the Middle East and North Africa eased slightly in 2007 to 4.9 % and will likely rise with the help of high oil prices to 5.4 % in 2008. In oil-exporting countries, higher oil prices are adding to revenues, some of which are being invested infrastructure in countries like Algeria and Iran.  Diversified exporters like Jordan, Morocco and Tunisia are enjoying double-digit growth, thanks to increased trade demand from Europe.

  • Notwithstanding the severe drought that afflicted countries in the Maghreb, a revival in European demand helped underpin exports for the resource-poor, labor-abundant countries in the region. 

  • Moreover, record inflows of FDI, ample liquidity, and strong domestic demand all bolstered growth across the diverse countries of the region.

In Egypt, Morocco, and Tunisia, reforms are improving the business climate and increasing the competitive ness of the export sector.

Egypt, Jordan, Morocco, and Tunisia signed a free trade agreement (the Agadir Agreement) to help promote intraregional trade while addressing rules-of-origin questions that often are part of broader frameworks, such as the European Union–Mediterranean agreements.

FDI is becoming an important driver for private investment and growth in this group of countries, and as reforms proceed, the potential for attracting additional FDI grows in step.

Developing countries must improve capacity to absorb and use technology

Technological progress increased 40 to 60 percent faster in developing countries than in rich countries between the early 1990s and early 2000s,” said Andrew Burns, Lead Economist and main author of the report. “Nevertheless, developing countries have a long way to go, given that the level of technology that they use is only one quarter of that employed in high-income countries.”

In fact, rapid technological progress in developing countries has helped to:

  • Raise incomes and,
  • Reduce the share of people living in absolute poverty from 29 percent in 1990 to 18 percent in 2004.

Despite these gains, the technology gap between rich and poor countries remains enormous, and the capacity of developing economies to adopt new technology remains weak.

Developing countries to cushion rich-country slowdown in 2008

"Overall, we expect developing-country growth to moderate only somewhat over the next two years.However, a much sharper United States slowdown is a real risk that could weaken medium-term prospects in developing countries," said Uri Dadush, Director of the World Bank’s Development Prospects Group and International Trade Department.

Resilience in developing economies is cushioning the current slowdown in the United States, with real GDP growth for developing countries expected to ease to 7.1 percent in 2008, while high-income countries are predicted to grow by a modest 2.2 percent.