Impact of COVIDE19 on Tunisian Imports, Economic Research Forum Working Paper
Tunisia - 22 January 2022
COVID-19 pandemic caused significant disruption of trade flows between countries, revealing the vulnerability of global value chains. This unexpected event sparked a public debate on devising new policies to increase the resilience of value chains. This study identifies vulnerabilities related to supply chains with a specific focus on Tunisian imports during the period 2019-2020. To this end, we select three potential drivers of import vulnerability based on post-pandemic reports and discussions and assess their impact on Tunisia’s overall imports using quantitative analysis. We consider, for each product, (1) the market concentration of Tunisia’s suppliers, (2) the intensity of imports and (3) we also consider COVID-19 products – that we call ‘essential products’ – as potential source of import vulnerability and assess their impact separately. These factors are country-specific product characteristics. Then, we identify a model based on first differences estimator to assess the impact of the change in vulnerable imports on the change in total imports at the country-month and country-quarter levels using import data for the period 2019-20. Finally, we use input-output linkages to assess the level of exposure of Tunisia’s local industries to vulnerable supplies from partner countries through a downstream propagation approach. This framework will help us get insights into Tunisia’s most sensitive imports and industries.