Wednesday, May 1, 2013

Economic Turmoil in Tunisia


In early March, a cigarette vendor named Adel Khazri set himself on fire in the capital, Tunis, an act reminiscent of Mohamed Bouazizi’s self-immolation that triggered the beginning of the Jasmine Revolution. He was protesting the high level of unemployment in the country. Overall unemployment is currently 17%, with levels as high as 30% in rural areas (F.T., 2013).

The struggling economy remains the focus of Tunisia’s civil unrest. Despite current changes regarding women’s rights and the reemergence of the Salafist movement, high unemployment and rising debt are the focus of international attention. Many blame “tunisia’s tax code [that] favours exporting companies. Those that sell locally face higher tariffs and more regulation”(F.T., 2013). This creates a dynamic where exports are encouraged rather than investment, trade, and capital flow within the country’s borders. Similar to this globally-focused economic dynamic, many believe that economic policy has been formed in favor of the global market rather than for the benefit of the country, and hope that “economic policy will be written for the Mohammed Bouazizis of the world rather than the bankers” (Ryan, 2013).
The 2013 WSF was located in Tunis.

Another aspect of the current economic turmoil in Tunisia is the “looted assets”(Reuters, 2013) from Ben Ali’s rule; recently Tunisia received a check for $28.8 million dollars, retrieved from a Lebanese bank account held by Leila Trabelsi, former president Zein al-Abidine Ben Ali’s wife. This is the result of a appointed UN representative’s efforts to recover stolen assets; billions remain missing.

Both the International Monetary Fund (IMF) and World Social Forum (WSF) are currently playing roles in the country regarding rehabilitation of the economy and next steps for Tunisia’s government. Tunisia is currently negotiating a $1.78 billion dollar loan from the IMF in order to keep the economy afloat. However, the way in which the IMF is pushing economic reform could undermine the public’s confidence in the democratic transition of the government if the new policies are pushed through without the debate and approval of the country’s elected officials.

In terms of political stability, a reemergence of a "Bourguibist" tradition has been predicted, based upon the rule of Ben Ali’s predecessor, Habib Bourguiba, who was deposed in 1987. Currently, the government is attempting to retain legitimacy in the democratic transition by including more parties; the Prime Minister, Ali Laarayedh, ceded key ministries to non-party figures in response to the assassination of leftist politician Chokri Belaid on February 6th of this year (E.B., 2013).

Demonstration at the World Social Forum in Tunisia
Focusing upon the economic instability of the country and ways in which economic policy can reflect negatively upon the democratic transition of Tunisia is important when considering the future of the country. As a “homegrown” revolution originally, Tunisia may face further and increased uprisings if the public does not feel that anything has changed. Based on Tunisia’s past experiences and the current social climate, it seems that future demonstrations will continue to be largely nonviolent. The protests will most likely also continue to include the most affected parties, which are the younger college-graduate part of the population, that is highly educated and in dire need of opportunities.

Tunisian Flag
The public will need to see improvement in job opportunities and over all unemployment rates, as well as accountability and transparency within the government that indicate a successful democratic transition. I would recommend that the government wait until the legislative and presidential elections later this year to make decisions concerning the IMF loan, so that the process is facilitated by elected officials rather than representatives from the IMF. I would also recommend that the government pay particular attention to changing cultural and social factors; the backlash from the states previous restraint of Muslim practices and religious parties and the growing ambiguity of women’s rights will be important changes that could affect economic and political issues as the cultural climate of Tunisia changes. For now, it seems we will have to wait for the elections this fall to see what Tunisia does with this rare opportunity to redefine itself.

Works Cited:

E.B. “Macbeth in Tunis: Fair is foul and foul is fair.” The Economist. 25 March 2013. <http://www.economist.com/blogs/pomegranate/2013/03/macbeth-tunis>

F. T. “Tunisia’s economy: Still struggling.” The Economist. 19 March 2013. <http://www.economist.com/blogs/pomegranate/2013/03/tunisias-economy>

Reuters. “Tunisia: Millions recovered from ex-leader’s assets.” The New York Times. 11 April 2013. <http://www.nytimes.com/2013/04/12/world/africa/tunisia-millions-recovered-from-ex-leaders-assets.html>

Ryan, Yasmine. “Tunisia World Social Forum to blast austerity.” Al Jazeera. 26 March 2013. <http://www.aljazeera.com/indepth/features/2013/03/201332653645288688.html>


7 comments:

  1. Really interesting to read about as Morocco (my risk analysis country) is in a somewhat similar situation as Tunisia

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  2. The future of Tunisia will most definitely rely on the results of the recent economic conditions. In order to move toward a more stable environment, socially and politically, the economy needs to be the forefront of issues. Focused attention on the economy will lessen the tension that exists and hopefully be the start to the end of civil unrest in Tunisia.

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  3. I believe that Ben Ali still holds many of the cards in shaping the future of Tunisia despite the fact that he is no longer in power. The new government should unite around the shared goal of pressuring the Ali family to turn over the rest of the billions that are unaccounted for and thereby help to settle some of the economic unrest while also granting legitimacy.

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  4. The future of Tunisia is difficult to predict. In my opinion Tunisia is headed in a positive direction. I do agree that Tunisia's debt and growing unemployment pose a threat to a democratic future. But on social fronts great strides have been made, and it appears to me both the people and government would like to transition towards democracy. Hosting the World Social Forum last month demonstrated that Tunisia would like to open itself up to change. Human rights watch groups are also less restricted and silenced these days. The Tunisian Human Rights League, the first human rights organization in Africa and the Arab world, which operated under restrictions and state intrusion for over half of its existence, is now completely free to operate. It will be interesting to see if they decide to take the loan from the IMF. If not, Tunisia needs to find some other way to invest in itself as a country and turn around the growing unemployment rate. The elections in the Fall, if they end up being free and fair, will demonstrate a more clear voice in what the public wants.

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  5. Negotiating with the IMF and World Bank is not an easy task. In past examples, countries are required to agree to the IMF/World Bank economic policies and vision for the country with little room for the country in question to discussing terms and conditions. The IMF focuses on global economic structures encouraging the country in which they loan money to open their markets to more global businesses and markets. Thus, taking the money is not always the best outcome for the people of that country who are looking for new employment opportunities. I could see Tunisia's economic situation going two ways depending on the willingness of the people to participate and how much the government wants to combat unemployment issues. Either the people will be willing to attain the higher education and skills training needed for Tunisia to place them in high level skilled position with global companies or continued protests against the government for lack of jobs because the people are not put into these positions for a whole host of reasons. I agree that the new legislature and president should be the ones to decide on accepting the bailout. The only way the people of a country can keep their politicians attune to their needs is through elections and allowing elected officials to make the decision gives the people a way to demonstrate dislike in policies in the following election outcomes.

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  6. Hey Claire! How do you see the unemployment rate being fixed? More government jobs?

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