Ticket | A reform that does not cost much

There are reforms that do not cost, neither financially nor socially and which nevertheless bring a lot to the economy in terms of jobs and growth, and make it possible to contribute in the long term to the development and progress of the country. The reform of market competition policy is part of the same vein of these virtuous transformations that help put the economy back on track. And it’s no secret that Tunisian markets are far from contestable. However, the contestability of the markets has always been an idea and a concept defended and encouraged by donors because it makes it possible to maintain prices at an efficient level (thanks to the pressure exerted by the possibility of entry), ‘open the gap for innovation and stimulate investment. Several studies have even shown that competition in the markets for factors of production (energy, telecommunications, financial services, etc.) has a very positive effect on productivity in general in all other sectors. Conversely, cartelized markets suffer from excessive prices and a drop in productivity and investment. In a nutshell, non-contestability stifles growth and impairs consumer welfare. You simply have to imagine the economic windfall that opens up thanks to a reform that can be undertaken in favor of market competition in Tunisia, where 50% of the economy (according to the World Bank) is completely locked through restrictions on access and the prevalence of legal monopolies, and where sections whole economy is downright sclerotic because of the monopolies that bar the way to new entrants who can, however, challenge the markets and increase the competitive capacity of companies. Wholesale and retail trade, telecommunications, transport, banking market… The sectors which are difficult to access are legion and the onshore sector functions in a sub-optimal way due to its low contestability. Indeed, in addition to the monopolies held by the State (certain public enterprises), the prior administrative authorizations and the restrictive conditions required by the specifications as well as the difficulties of access to financing, especially for SMEs, are all forms barriers to entry. Dismantling these barriers, not without promoting the culture of the “Champion”, can only be beneficial for both the “new” entrants and the old ones. Without falling into excess by pillorying those who have succeeded in breaking through, improving competition on the Tunisian markets by breaking down the locks that curb this virtuous competition, is precisely the kind of salutary reforms on which it is desirable to put the cap.

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