Tunisia: economic, social and political collapse

Is Tunisia drifting? 

Today the image is of a disorientated country, overwhelmed by its delicate economy - a major evil - which greatly aggravates the future of a population tired of successive governments¹ since the revolt² of 17 December 2010³ in Sidi Bouzid, which have failed to offer viable solutions in the short, medium and long term for this beautiful Mediterranean nation full of mixtures and imprisoned by its leaders.

Tunisia was deeply affected by the Jasmine Revolution of 2011. High unemployment, food price inflation, corruption, lack of political freedoms and poor living conditions were at the root of those protests. Despite the ouster of President Zine El Abidine Ben Ali in January 2011, the country has never recovered economically. In 2020, the already precarious situation was aggravated by the economic crisis caused by the COVID-19 pandemic. GDP reached -8.8% in 2020. According to the IMF's April 2021 updated forecast, GDP growth is expected to recover to 3.8% in 2021 and stabilise at 2.4% in 2022, depending on the post-pandemic global economic recovery. While the COVID-19 crisis has worsened the situation, economic resilience has dried up due to indecisive public policies and a growing protectionist attitude by governments. (see box below)

IMF directors recommend that fiscal policy and reforms should aim to reduce the deficit. In this context, they emphasise the need to reduce the wage bill and limit energy subsidies, prioritising health spending and investment, as well as protecting targeted social spending. Directors noted that Tunisia's public debt would become unsustainable unless a strong, credible and broadly supported reform programme was adopted. They also urged the authorities to make taxation more equitable and pro-growth, and promoted measures to clear accumulated arrears in the social security system. They stressed the need for far-reaching reforms in state-owned enterprises to reduce contingent liabilities. They encourage the authorities to adopt a plan to reduce fiscal and financial risks in SOEs, strengthen corporate governance, and improve transparency and financial reporting.

The extreme poverty rate, set according to the international threshold set at $1.90 per day, was nevertheless kept below 1% in 2020. But using a threshold of $3.20 per day, poverty would have increased from 2.9 per cent to 3.7 per cent. The estimates also predict an increase in the percentage of the "vulnerable" population at risk of poverty. Taking into account a threshold of $5.50 per day, the proportion of poor and vulnerable people should have increased from 16.7 per cent to 20.1 per cent of the total population, estimated at 11.7 million (World Bank estimates 2019-2021).

Promoting private sector activity is key to increasing potential growth and making it more job-rich and inclusive. Reforms should focus on eliminating monopolies, removing regulatory barriers and improving the business climate. As the country suffers the impact of COVID-19, its debt burden will increase significantly, given the sharp slowdown in growth and the deterioration in the primary fiscal balance following the decline in revenues and the measures taken to cope with the crisis. By 2020, public debt is expected to have reached 89% of GDP and external debt 110% of GDP. Therefore, to ensure debt sustainability, the Tunisian authorities will need to pursue a prudent macroeconomic policy in the medium term and, above all, to proceed with continued vigorous consolidation of public finances, once the coronavirus crisis is over.

However, three factors could reduce risks to debt sustainability: first, most external and public debt is owed to official creditors; these loans have relatively low average interest rates and long maturities, reducing debt service obligations. Second, the risk of large exchange rate fluctuations, which could strongly influence debt levels, is low compared to other emerging countries, as Tunisia does not allow international investments in short-term instruments, which could be quickly cancelled. Third, Tunisian banks have low exposure to sovereign debt and foreign currency denominated liabilities, which increases their resilience to unforeseen shocks.

President Kais Saied decided to freeze the activities of parliament and dismiss the head of government and the defence minister. He has also granted himself executive power. For Vincent Geisser⁵ , this is a "coup de force", but "we must be careful and wait" before speaking of a "dictatorship". "We must hope that we will return to a kind of republican line of wisdom", adds the specialist. The truth is that the 2019 elections brought a corrupt political class that did not respect the rules of the electoral game, according to the report of the courts of accounts that audited the accounts of the lists that participated in these elections, in addition since 2019, there are major political tug-of-war, and struggles so important that the country has been paralysed economically, in fact the political parties have privileged partisanship rather than serious work, guided by Nahdha, Karama, Kalb Tounes ;

As a result, President Kais Saied performed constitutional gymnastics and relied on Article 80 of the Constitution to freeze parliament and lift the immunity of parliamentarians, and to dismiss the head of the government, and seize all powers for a period of 30 days⁶ .

Another aspect to take into account is the rentier economy⁷ that the country suffers from, access to markets is limited by law to a minority of businessmen who have strong links with the administration on the one hand and parliamentarians on the other.... These individuals, who were already dominant in the previous regime, are today the financiers of corrupt political parties and supporters of entry barriers to preserve their market share. Moreover, these same people control the banks and limit access to finance for competitors and benefit only from the finance available for their own interests.

A rentier country is one whose economy relies on substantial external rents that are generated only by a minority part of society and whose main recipient and distributor is the government of that country. Beblawi (1987)⁸.

Very much in the style of what was happening before the 2010 uprisings in different sectors; let us recall the quasi-Mafia family style⁹ of the Trabelsi family¹⁰ whose tentacles reached into banks, companies, licences for foreign companies to enter the country, etc. (cases of alcohol sales in restaurants, which gave them an advantage over the rest, vehicle import licences for friends and people close to power, monopolies and cartels protected by the state in sectors such as the financial sector with a state share of approximately 38%¹¹ , wholesale sales, etc.). Members of the Ben Ali family have particularly enriched themselves by participating in public tenders, winning most of them with the help of local regulations tailored to their needs. Members of the BAT clan¹² have built up an enormous real estate wealth of palaces, villas, yachts, and luxury cars). This cancer is very difficult to combat and is still very much embedded in sectors of the Tunisian economy¹³ .

"If we are like this, it's because of the political parties who think only of themselves," breathes Adel Ben Trad. At the stall where he works in the Bab El-Falla market, one of the most affordable in Tunisia, this 50-year-old butcher has seen the situation deteriorate since the fall of the dictator Zine El Abidine Ben Ali in 2011. He therefore fully approves of the coup de force of the President of the Republic, Kais Saied, who has just frozen the activity of parliament and granted himself executive power, taking advantage of the widespread hostility of public opinion towards the rulers. In the past, his steaks and lamb chops were very popular. But today, red meat no longer has its place in the budget of many Tunisians. "In ten years, we must have lost half of our customers," says the employee.

It is difficult to predict, but it could be the case that there is a temporary, provisional coup d'état whose aim is for the President of the Republic to regain his advantage, impose his ministers and his public policies, or that it is the beginning of an authoritarian process of personalisation of presidential power, and the transition from the second democratic Republic to a third Republic whose orientation is very uncertain and which would be much more authoritarian than the second. A democracy emerging from an authoritarian regime that has lasted more than 50 years, 23 of which were under Ben Ali, is usually fragile. The truth is that Tunisians have been used to being bossed around for many years and have not yet been able to digest, manage and enjoy this incipient democracy. Deeply entrenched structural unemployment, deteriorating public infrastructure, ongoing inflation... All of these factors at the root of the 2011 revolution continue to plague Tunisia, causing bitterness to match the hopes raised in 2011.The parliamentary coalitions that have been successful since then have failed to reform the economy and the pandemic has brought the small North African country to its knees^14. Promoting private sector activity is key to increasing potential growth and making it more job-rich and inclusive. Reforms should focus on eliminating monopolies, removing regulatory barriers and improving the business climate.

His campaign, conducted with only 4,000 euros, far from the spotlight, is bearing fruit among young people: nine out of ten voted for the candidate. "Everyone remembers him, drinking his espresso, with a cigarette in his hand, visiting cafés in the country's villages," recalls Yasmine Gmar, a former law student of Kais Saied. The young woman, who now lives in France, remembers a stoic-looking professor, but one who was appreciated by his students: "There was a clan of professors who were quite close to the government, but he was not part of any group, and he was proud of it. It was impossible to tell whether he was left-wing or right-wing.... A real political UFO!

He is conservative without being Islamist, populist without being demagogic.... He does not fit into any mould. Yet, two years after his election, Kais Saied is struggling to keep his promises. COVID-19, police violence... Tunisia is going through a multifaceted crisis, aggravated for several months by the rivalry between the presidency and the head of government. Above all because the head of state's detractors reproach him for his increasingly 'authoritarian' tendencies. In April, Kais Saied had already provoked controversy by claiming to be the supreme commander of all military forces, including civilian ones.

Will this new turn of events allow the young democracy to emerge from its uncertainty? "What is certain is that the president is bringing Tunisia out of its state of immobility. A country like Tunisia, geographically privileged, oriented towards Europe, with high education rates, cannot remain immobile, and imprisoned by a grey, cumbersome and overly civil service administration when decisions have to be taken. The economy demands urgent responses and Tunisia deserves them.

Kais Saied's decisions were greeted with demonstrations of joy by the majority of Tunisians, who did not hesitate to shout "Down with Parliament" and denounce the Islamists of Ennahda. Reactions that leave no room for concern, knowing that Tunisians are pragmatic, viscerally attached to democracy and abhor adventurism and leaping into the unknown. They understood that their president was pushed to the limit by two men: the head of the government and Ghannouchi, the leader of Ennahda15 .  Ennahda has been involved in government management since 2011. True to the practice of infiltration so typical of the Muslim Brotherhood, it strove to interfere as much as possible in the management of society's affairs to the point of demanding, for example, compensation for the victims of Ben Ali's dictatorship, which is like saying "Ennahdaist" activists, while the country is on its knees economically and the COVID pandemic has become unmanageable, problems that were an existential threat to Tunisia. All this is accompanied by corruption worthy of the Ben Ali era. Tunisians were not born yesterday, they saw what was coming and immediately understood the danger. Tunisia does not need Islamism, what it needs are viable economic solutions and to implement them immediately. However, in a country that is on the verge of bankruptcy, Ennahda not only does not propose an economic programme, it does not question either the liberal turn adopted by the state since the 1980s or the reforms imposed by the financiers without proposing solutions to the country's crisis. Let's give Kais Saied time, cleaning up the state administration is no easy task, and it requires tough and definitive measures. Tunisia needs us and we in Europe need it too. The Mediterranean needs a Tunisia in the best possible condition.

References:

1. presidency of Marzouki (2011 - 2014), presidency of Béji Caïd Essebsi (2014 - 2019), presidency of Kaïs Saied (2019 - ).

2. The Tunisian democratic revolution, whose future is uncertain and likely to be reversed, remains the most important event to have taken place in the Arab world since World War II. (The Tunisian lesson.essay : Sami Naïr)

3. Although according to Noam Chomsky, the famous American philosopher and activist, he considers the October 2010 protests in Western Sahara to be the starting point of the revolts. Chomsky, Noam; Bishara, Marwan (21 February 2011). "The genie is out of the bottle". Al Jazeera.

4. https://www.imf.org/fr/Countries/TUN/tunisia-qandas

5. Vincent Geisser, researcher at the Institute for Research and Studies on the Arab and Muslim World (Iremam).

6. Bassem Jmal. Expert in Strategy, Governance and Corporate Finance at SGFE

7. Rentier state is a term used in politics to designate countries whose revenues derive from non-productive (primary-export) economic activities, generally oil extraction, neglecting the development of other sectors of the economy that would guarantee sustainable development and facilitating the destruction of natural resources in pursuit of immediate economic profitability. According to some political scientists and economists, this practice tends to be consolidated in non-democratic governments and allows dictatorial governments to limit public freedoms, preventing the emergence of large social groups that disagree with the regime.

8. Beblawi, H. 1987. "The Rentier State in the Arab World. In The Rentier State, ed.

9. The Ben Ali-Trabelsi clan was an organisation with a family clan structure in the strictest Mediterranean mafia tradition that developed within the Tunisian political and economic system through corruption and threats. The characteristic of this Trabelsi clan is their lack of education, their low social status and their greed for wealth. (the nouveau riche)

10. Leila Trabelsi, Ben Ali's wife, shadow president and true czarina who ruled by decree.

11. The Tunisian financial sector was involved in serious corruption scandals and financial mismanagement based on personal links with a portfolio of bad loans granted to Tunisian businessmen who use their links to power to never pay them back. (I personally witnessed this during my time in Tunisia).

12. BAT : Ben Ali-Trabels

13. La régente de Carthage, Nicolas Beau, Catherine Graciet. Toute la vérité sur la chute du président Ben Ali
Chokri Gharbi (Author)

14. https://information.tv5monde.com/

15. Échec de l'islamisme tunisien. TAYEB BELGHICHE