Tunisian Economy Threatened as Libya Unravels

The country draws in 100,000 patients a year from Libya, bringing total revenues from Libyan tourism to 890 million Tunisian dinars ($510 million). If this flow drops because of the recent events in Libya, it will affect this crucial sector. The survey noted that in 2011 the number of Libyan tourists in Tunisia fell 30%, but confirmed that at present an annual increase of 5.3% was being recorded. Tunisian tourism is called to “once again prove its resilience.”

Meanwhile, the number of Libyan refugees in Tunisia has rapidly increased. Some say that this benefits Tunisia, but they fail to consider the impact of this massive influx on state finances. The influx will directly impact real estate markets and inflation, and will likely threaten internal security. According to ESCWA, Tunisia is not equipped to handle a large influx of refugees because the country’s asylum system does not meet international standards.

Another consequence of the instability in Libya is the return of Tunisian workers living in Libya. The report indicates that about 40,000 Tunisian workers left Libya in 2012. This number is likely to increase if the conflict persists. Moreover, the World Bank estimates that remittances to Tunisia generated by these workers represent 0.56% of Tunisia’s GDP. Although the remittances seem small, their loss could affect the private sector. The return of Tunisian workers will also impact the labor market, further increasing unemployment in Tunisia.

In sum, the ESCWA report reveals that the Libyan crisis will jeopardize economic development in Tunisia over the medium and long terms. Even a small impact could have significant consequences for the country. In addition, the security deterioration presents the Tunisian authorities with a challenge: dismantling the networks smuggling in weapons that are used to commit terrorist attacks and countering the jihadists who are trying to infiltrate Tunisia.

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