Background and general framework of the project
The Tunisian economy has been resilient in the last few years. The standard of living of Tunisians has improved and the poverty rate has declined. However, the extensive regulation in the country – compared to many OECD countries – prevents it from reaching its full potential.
In the context of a programme undertaken by the Government of Tunisia and the Millennium Challenge Corporation (MCC), the OECD has been asked to share its extensive experience in competition assessment and in capacity building in order to identify restrictions and provide recommendations that aim at increasing consumer’s welfare and economic growth.
In co-operation with Tunisia, the OECD is conducting a review of laws and regulations in the freight transport and the retail and wholesale trade sectors. The project started in August 2018 and the OECD recommendations will be presented in June 2019.
The OECD is using its Competition Assessment Toolkit, which is designed to identify shortcomings in the regulatory and policy environment. The Toolkit is organised around a list of questions that screen whether regulations can potentially restrict competition, for instance by creating barriers to entry or by discriminating between suppliers. The OECD is holding extensive consultations with the Tunisian administration and other stakeholders to tailor the analysis and the recommendations to the Tunisian reality.
This work is complemented by workshops to build the capacity of Tunisian officials to conduct competition assessment, in line with international best practices.
The essential role of competition
Increased competition can improve a country’s economic performance, open business opportunities and reduce the cost of goods and services to the benefit of consumers.
Although laws and regulations are necessary for the well functioning of our societies and economies, in some cases they can restrict competition, preventing the said benefits from taking place.
Competition assessment is the process of identifying restrictive regulations and developing alternative, less restrictive measures that still achieve government policy objectives. This exercise could significantly reduce unnecessary restrictions and contribute to continued and sustained growth.
Why the transport sector
The Government of Tunisia, MCC and the OECD have decided to focus the project on maritime freight transport, road freight transport, and support activities for maritime and road transport – such as logistics platforms or freight forwarding services – due to their economic importance.
Maritime transport accounts for the vast majority of Tunisian foreign trade, followed by road transport which is also essential for internal trade. Support services to freight transport have a crucial role in modern multi-modal chains of transport. However, they are estimated to be significantly more expensive in Tunisia than in other emerging and developed countries.
Why the retail and wholesale trade sectors
The Government of Tunisia, MCC and the OECD have decided to analyse wholesale and retail trade, with a focus on fruits, vegetables and red meat. Food price inflation has been on an upward trend in the last few years, with fruits and vegetables among the products whose prices have increased the most. These are important products for Tunisian households and therefore their prices have an impact on purchasing power, especially for lower-income consumers.