(This post, a translated version of my article in MakronomMagazin, replaces an earlier post here on Tunesia.)
On the tenth anniversary of the Arabellion, Tunisia´s youth fought street battles with the police. People are angry and disappointed about the desolate situation of the country. "Those in power are now others, the system has remained". "What good is press freedom if I have no work?" they complain.
The Federal Ministry for Economic
Cooperation and Development (BMZ) has significantly increased funding for
Tunisia over the last decade. At the heart of Germany's engagement is the
reform partnership with Tunisia within the framework of the Marshall Plan with Africa. It was
concluded in 2017 as a bilateral contribution to the G20 Compact with Africa initiative. According
to the BMZ, Tunisia is a beacon of political hope in North Africa
and, after a long phase of dictatorship, is on its way to transforming
itself peacefully into a constitutional state. Despite political and social
tensions, democratic development in the country is considered exemplary, says
the BMZ on its official Tunisia page. Civil society has been strengthened after
the end of the Ben Ali regime. The Federation of Trade Unions, the Employers'
Association, the Human Rights League and the Bar Association were honoured with
the Nobel Peace Prize in 2015. In short: Tunisia is a donor darling and, in the
eyes of many "Westerners", something of a prime example of a
successful democratic transformation.
Recent analysis praises[1] Tunisia's comparatively good social contract and its
inclusive development model. But doubts are allowed as to whether Tunisians on
the ground also see it that way. Violent
clashes between demonstrators and the police, looting of supermarkets and
hundreds of arrests currently characterise the Tunisian provinces and cities.
Libanese economist Ishac Diwan warned some time ago that things were getting
out of hand in Tunisia[2]. Even before the Covid pandemic, cronyism and illegal underground
activities were draining the growth of Tunisia's economy - except from the
corruption-prone construction sector - a consequence of weakened state capacity
to enforce law and order. While public investment languished at 5% of GDP, the
public wage bill rose from 10 to 15% of GDP over the past decade. The increase
in social spending also benefited mainly civil servants, not the poor
hinterland. The Gini coefficient remained high, at 40%.
Nearby Italy in particular is feeling the
unabated wave of
migration from Tunisia. In Tunisia, illegal emigration to Europe, typically
by boat, is commonly referred to as Harqa
(Arabic for burning the border). Harqa
is an exit strategy for those who experience severe marginalisation at
home. While Tunisia is also a transit country for migrants from sub-Saharan
Africa, it is primarily a country of origin. According to Migrationdataportal,
Tunisia's total migration loss (immigration - emigration) between 2011 and
2020 was 170,000 . Almost 7% of Tunisia's population (nearly 12 million) live
abroad. In 2020, the Tunisian diaspora supported the notoriously deficit-ridden
current account balance with private remittances amounting to 5% of national
income (GNP).
A multitude of problems continue to plague
Tunisia after the Arab Spring. Some prominent examples are the stagnation of
the nationwide standard of living, pervasive corruption and an exceedingly high
unemployment rate. According to the IMF, the external value of the dinar
against the euro has halved since the Arab Spring, and foreign exchange
reserves have also halved over the past decade [3].
Of course, the covid pandemic hit Tunisia
particularly hard, as employment and foreign exchange earnings depend heavily
on tourism. But according to OECD analysis[4], direct investors have been very reluctant to invest since the Arab
Spring, so the country has not been able to diversify away from its dependence
on tourism by creating new jobs. Formal employment has grown too little to
engage the youth and give them a perspective. The relatively good education of
young Tunisians also implies frictions in labour supply: What kind of industrial
manufacturing jobs are even accepted?
Advice comes easy from "backbenchers"
in Washington, Paris or Berlin[5]. It is known ad nauseam:
·
promote labour-intensive
industries, ideally through attractive location conditions for foreign direct
investment;
·
reduce or eliminate subsidies
for fossil fuels;
·
consolidate the state budget by
cutting public consumption.
However, the government's fiscal space and
the people's patience seem to be exhausted. Cutting public consumption, half of
which is civil servants' salaries, would also turn civil servants against the
government.... High energy prices hit the province and the poorer part of the
population. Foreign direct investors, despite lower political governance
scores, prefer Egypt as a destination, where the military complex determines
industrial policy and guarantees the security of direct investment [6]. Is Tunisia's young population too close to Europe and too well
educated for the Asian model of transformation through labour-intensive
industries to really have a chance there? A mismatch between skills supplied by
the formally well-educated youth and the basic skills required for labour-rich
manufacturing may stand in the way of replicating East Asian development
strategies.
No doubt: In principle, Tunisia has undeniable
assets and is quite well integrated into global value chains: its geographic
location on the border between Europe and Africa, many years of investment in
education, specialisation in future niches, including the pharmaceutical or information
technology sectors. However, Tunisia's attractiveness suffers from
·
the numerous, often cumbersome
regulations and administrative procedures,
·
the foreign investment regulations,
which are more restrictive than in Egypt and Morocco, and
·
the delays in crossing the
border (customs and transport logistics), which are often longer than
elsewhere.
·
Some investors also complained
about a skills gap, even though 28 per cent of graduates are unemployed. [7]
A remark made in 2017 by the Middle East
expert Torelli of the Roman policy institute ISPI (Istituto per gli studi di politica internazionale) rings today as a
warning[8] , also for the BMZ: "One of the mistakes of recent years has
been the EU's tendency to sing the praises of Tunisian democratisation. While
the country has achieved a good degree of formal democracy, there are still
many critical problems related to the economy and political instability." Consensus
politics against a backdrop of rising polarisation between Islamists and
secularists has stymied Tunisian politics.
In retrospect, euphoric donor rhetoric (praising
Tunisia´s rule of law and human rights) has proved counterproductive by
intensifying authorities´ moral hazard. The Tunisian government had the upper
hand in renegotiations with the IMF and multilateral lenders, not least backed
by donor rhetoric. Conditionality was undermined (especially with regard to
wage costs in the public sector), without impact on disbursements (Diwan, 2019,
op.cit.). On the other hand: Instead of warm words, the EU has not been able to
offer tangible incentives for higher productivity - such as an accession
perspective along the lines of EU enlargement to the East.
[1] Amirah
El-Haddad (2020), "Redefining
the social contract in the wake of the Arab Spring: The experiences of Egypt,
Morocco and Tunisia", World
Development , Vol. 127, March 2020, 104774.
[2] Ishac Diwan (2019), Tunisia's Upcoming Challenge: Fixing the
Economy Before It's Too Late, Arab Reform Initiative, Bawader, 23. September.
[5] Vgl. https://www.compactwithafrica.org/content/compactwithafrica/home/compact-countries/tunisia.html;
IMF (2019), op.cit.; und OECD (2020), op.cit.
[6] Amirah El-Haddad (2020), op.cit.
[7]
Isabelle Joumard (2020), "Emerging
countries are not all in the same boat in the face of the Covid crisis and the
reorganisation of global value chains", Leaders, Tunis, 17 May.
[8] Stefano Torelli (2017), "Escaping
from Tunisia", Brüssel: European Council on Foreign Relation,
Commentary #7236, 10. November.