Africa > North Africa > Tunisia > Economic and political situation is looking increasingly gloomy

Tunisia: Economic and political situation is looking increasingly gloomy


Nearly three years next protests ousted President Ben Ali, the economic and political situation is looking increasingly gloomy

In late 2010, a Tunisian market trader set himself on fire in turmoil against the country’s authoritarian regime, triggering a series of revolutions that toppled three north African governments and a wave of optimism about the region’s next. But nearly three years later, it is all too easy to spot signs of economic strife in the birthplace of the Arab Spring.

While the revolution that ousted Zine el Abidine Ben Ali, who had been in power for 23 years, paved the way for democratic elections won by the moderate Islamist Ennahda party, the conditions that fostered the mass turmoil movements are still very much present. 

Safa, 28, has a degree in English from a Tunisian university, but she lives with her family and is entering her fourth year of unemployment. She says that she would leave Tunisia if she could find a job abroad.

“Nothing has changed here, we are in a crisis,” she explains, noting that job opportunities corresponding to her specialty are scarce.

Unemployment, which was at a steady 13 % before the revolution, is currently at 16.5 %, and the rest of the economic picture is just as grim. Inflation is stable but high at 6.5 %, and abject poverty remains epidemic in the country’s interior. Eighty % of Tunisians believe the country has become additional corrupt, according to a poll released last week by Transparency International.

Tourism represents 7 % of Tunisia’s GDP and supports 400,000 jobs. However, the industry has from presently on to return to its pre-revolution level. “We will not perhaps have 7 million tourists [the country’s annual target], but 6.5 million, which will be better than in 2012, but at least 15 % less than in 2010,” finance minister Elyes Fakhfakah recently told Le Monde. According to Antonio Nucifora, the World Bank’s lead economist in Tunisia, events such as the assassination of opposition leader Chokri Belaid in February, and the recent crisis in Egypt, have a “significant impact” on bookings for the summer season and are likely to have repercussions for this year’s numbers.

The national protectionism and consequential high tariffs that still dominate the domestic economy as well hinder the industry. Indeed, tourism to Morocco has picked up substantially due to the higher price of airplane tickets to Tunisia. This sustained downturn is painfully obvious in Hammamet, a popular European tourist destination on the Mediterranean coast. The beaches are completely blank, even during the weekends, and the old medina’s souk — a congested cluster of vendors selling souvenirs — is a ghost town.

The volatile economic atmosphere, however, has been permeated by a few small but significant changes, inclunding a slight decline in protectionism that is producing an informal economy. In downtown Tunis, for example, street merchants hawk cheap wares from China and India. As locals explain, this was not the case before the revolution. Still, the onshore sector is subject to rigid national control.

The country’s political picture, meanwhile, is mixed. Mohamed Brahmi, the secretary-general of Tunisia’s People’s Movement party, was shot dead outside his home in Tunis on July 25 by unknown assailants. His assassination was the second of the year amongst political opposition. In February, the shooting of Chukri Beleid, leader of the Democratic Patriots party, prompted protests and a political crisis that that brought down Islamist prime minister Hamadi Jebali. The Ennahda government blamed that assassination on Islamic extremists, while the opposition claimed that authorities were responsible.

But despite fears that uprisings against Egypt’s Muslim Brotherhood government could spill into Tunisia the country has from presently on to react beyond a fledgling and divided version of the Egyptian Tamarod, a grassroots turmoil movement behind the toppling of President Mohamed Morsi. A rally called by Tunisia’s ruling Ennahda party was supposed to show support for the ousted President Morsi, but boasted sparse attendance and was quickly dispersed by the police.

Unlike in Egypt, Tunisia’s army continues to refrain from participating in or interfering with politics, but even that may be changing. “While Tunisia's army is not influential in the political process, unlike in Egypt, the risks of an institutional dislocation or even a military intervention are increasing,” says Samir Gadio, emerging markets strategist at Standard Bank.

Analysts claim that both the political and economic situations are likely to deteriorate in coming months, as the ruling Ennahda party loses ground. An international poll leaked to the media suggests they will only receive 12 % of the vote in elections, which were originally scheduled to take place before the end of the year. That reality may affect the passing of a new constitution by the National Constituent Assembly, observers argue.

“In this context, Ennahda's strategy will probably be to delay the adoption of a new constitution and the general elections scheduled for late 2013 which will continue to take a toll on the economy,” Mr Gadio argues.

“We know based on analysis that nations going through democratic transitions that postpone the economic reforms tend to fail,” Mr Nucifora says. “The economics and the political process reinforce each other, and if you postpone the sequence, it’s not going to work.” 

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