As the first country in the Middle East and North Africa (MENA) region to sign a European Union Association Agreement (EUAA) in 1995, Tunisia saw the need to strength its business environment in the face of increased competition from the European Union. Furthermore, Tunisia’s insolvency system needed to be improved as banks and other enterprises were privatized in the opening economy. To this end, the nation’s 1995 insolvency law was amended twice—in 1999 and again in 2003.
Slow and steady reforms were a winning combination, this case study finds. Improving Tunisia’s insolvency system helped pave the way for further reforms that eliminated barriers to new business start-ups and created job opportunities.
- Tunisia’s insolvency reforms helped improve the nation’s business environment, as greater power was vested in the courts to help protect creditors.
- The reforms also helped speed up insolvency proceedings—benefitting both creditors and debtors—and promoted binding resolutions.
- At the macroeconomic level, Tunisia’s poverty rate declined from 8% in 1995 to just 4% in 2000.
- Liberalization helped boost productivity growth and market diversification. The export of manufactured products rose by 8% annually over this period.