This private sector assessment (PSA)aims at evaluating conditions for private sector developmentin Tunisia, how they evolved since 1994, and what are theremaining constraints to private investment. It lays out anelaborate framework, placing private sector development inTunisia, within the context of global economic integration,while facing increased competition from internationalcompetitors (particularly those accessing the Europeanmarket). The analysis of characteristics, and performance ofthe private sector reveals that although traditionally,Tunisian exports to Europe have been strong, they are nowchallenged by competition from Asian, and Central/EasternEuropean countries, a factor exacerbated by the continuedanti-export bias of the domestic economy, in light of othercountries' rapid investment incentives, which enableprivate activity to access the opening European market.Thus, improved competitiveness in the country is a majorissue. The report proposes reforms in incentives for privatesector growth, and in governance; discusses the need, andmeasures to expand financial access for small/mediumenterprises; and proposes options to lay the foundation of along-term private sector growth strategy. The reportcontains three volumes, the Executive Summary, and ProposedReform Agenda; the Main Report; and, Annexes.