Imad Darwees, Genaral Manager of Pertrofac, a British oil and gas detection and extraction company on the Kerkennah Islands off the Tunisian coast, said his company was forced to halt production for 40 days due to a strike staged by a number of citizens who shut down the company’s production while demanding work opportunities in other sectors. The shut down cost the company $200,000 per day – $160,000 for the Tunisian state. Petrofac then temporary laid off 80 % of its 170 workers.

Imad Darwees, Genaral Manager of Pertrofac, a British oil and gas detection and extraction company on the Kerkennah Islands off the Tunisian coast, said his company was forced to halt production for 40 days due to a strike staged by a number of citizens who shut down the company’s production while demanding work opportunities in other sectors. The shut down cost the company $200,000 per day – $160,000 for the Tunisian state. Petrofac then temporary laid off 80 % of its 170 workers.

“The company has contracts and financial commitments to the parent company in Britain and it cannot afford such a halt in production,” said Darwees, who warned that Tunisia’s reputation was in danger – and was no longer the favored destination for foreign investors.

Since the revolution in January 2011, protests for better wages and more work opportunities have led to frequent disruptions in productivity. As a result, European parent companies began complaining about the situation and stopped expanding their investments— in some cases they closed some of their Tunisian production units.

Four-hundred seventy foreign businesses left Tunisia between 2011 and 2014 (some 117 investments per year) which has cost the country 11,300 jobs. In 2014 alone, the country lost investments worth 63 million Tunisian Dinars (around US $31 million).

Darweesh said Petrofac has not yrt decided to leave the country; however, should the production paralysis continue, the parent company in London might seriously consider withdrawing its investment.

Increasing unemployment

Since the revolution, Tunisia has been suffering from increasing unemployment which reached 15.4 % last year compared to 13 % before the revolution.

This increase in joblessness resulted in rising social tensions that culminated in a new wave of protests in January 2016, where young people, especially university graduates, took to the streets to protest their marginalization and unemployment, echoing the same demands that spurred the 2011 revolution.

Yet economic experts say that the Tunisian employment market has reached its capacity and is no longer able to provide jobs for the large influx of university graduates every year. According to Tunisia’s National Institute of Statistics, 300,000 Tunisian students graduate from universities every year to join a pool of 622,000 unemployed people – 220,000 hold university degrees.

The current government under Prime Minister Habib Essid has set a new five-year development plan that drastically differs from the old one. The new plan aims at achieving an annual growth rate of 4.5 % and reducing unemployment to 11 % by the year 2020.

Foreign divestment in Tunisia

The Tunisian Foreign Investment Promotion Agency – the governmental body responsible for supervising and attracting foreign investment in Tunisia- admits the difficulty of the current situation.

Head of the follow up division, Hatem Al-Sousi said investors moved to Morocco and to a lesser degree to Eastern Europe.

Al-Sousi attributed this migration to rise of workers’ social demands or “worker revolutions” spurred by deteriorating wages and and to the discomfort investors felt from the social and security since the revolution, which in turn prompted European countries to warn against investing in Tunisia. Such uprisings caused severe damage in the social atmosphere within these institutions, which in turn negatively affected productivity.

Fewer strikes

According to the indexes of the Ministry of Social Affairs, the number of strikes and protests in the private sector decreased at the rate of 34 percent in the first three months of 2015 compared to the same period of the previous year, and 21 percent compared to 2013. The numbers of businesses linked to these protests also decreased at the rate of 36 percent compared to the year 2014 and 28 percent compared to the year 2013.

The lost work days resulting from protest in the same three months also decreased at the rate of 57 percent compared to the year 2014, but it increased at the rate of 12 percent compared to year 2013. The ministry report said that these protests took place in 65 private sector businesses of which 22 are foreign.

Al-Sousi said that parent companies in Europe no longer depend on their branches in Tunisia. This phenomenon says Al-Sousi can be attributed to the confusion and protests where protesters often blocked off streets and interrupted production, which in turn confused delivery deadlines and prevented products from reaching Europe.

A considerable number of foreign institutions active in Tunisia had plans to expand their investments in the country, according to Al-Sousi, which would have brought about movement of technology and provided more jobs. However, the security unrest and the three major terrorist attacks that took place in 2015 prompted these institutions to shift towards Morocco in particular. Al-Sousi said that under the current conditions, it is extremely difficult to attract new foreign investments to the country.

Unions’ dictatorship

Economic expert Mues Al-Joudi expressed his anger with the unions and held them primarily responsible for the loss of foreign and even local investments. He claimed that the ceiling of demands sometimes went beyond the financial abilities of the businesses, which affected its ability to compete. He also mentioned other reasons for this foreign divestment from Tunisia, most important of which is the security instability and the major terrorist attacks that took place last year. In addition, Al-joudi also views the instability in neighboring Libya as a reason for this migration, along with bad infrastructure and the unclear vision about the upcoming economic reforms.