Tunisia: The Economic and Social Priorities of the Transition
The European Community seems to have become aware of the challenges and the importance of the democratic aspirations driving the popular uprisings in Tunisia and Egypt against the corrupt dictatorships of Ben Ali and Mubarak.
Regarding Tunisia, the European Parliament voted on resolutions freezing the assets of the Ben Ali-Trabelsi family to return them to Tunisia, and promising Community aid to ensure the success of the democratic transition.
The purpose of this reflection is to identify the economic and social risks weighing on the Tunisian economy inherent in the situation that our country will go through in 2011, so that the aid provided meets the needs of the population that rose up against the Ben Ali regime with a central slogan repeated in all the demonstrations that led to its fall and which continue to demand the dismantling of the cogs of its system: WORK, FREEDOM, DIGNITY.
This slogan summarizes the political, economic and social aspirations of a people who no longer want the dictatorship of a Party-State, nor corruption, who want a Police at the service of the citizen (as demonstrated by the Army), an honest and independent Justice; in short, the Tunisian people want a democratic RULE OF LAW worthy of the name.
We will not go into detail in our discussion the political aspects of the reforms to be undertaken in Tunisia to dismantle the mechanisms of dictatorship and establish a democracy that lives up to the hopes raised by the fall of the Ben Ali regimes, just one month ago.
We note with satisfaction that important measures have been taken in this direction by the transitional government (release of political prisoners, return of exiles, project of a general amnesty, recognition of parties and associations that have requested it, lifting of many obstacles to freedom of expression, dissolution of the Party-State on which the dictatorship rested, ratification of international conventions concerning human rights including those abolishing the death penalty, prohibiting torture, creating the international criminal court, lifting of reservations on the elimination of all discrimination against women, etc.).
The debate on these reforms, in the commissions set up to make proposals in this direction as well as in the media, allows us to foresee the pitfalls and dead ends to be avoided, the options that limit the risks of diverting the revolution from its democratic objectives either by the restoration of the old system or by the establishment of a new dictatorship (hence the importance of a proportional electoral system, or with a dose of proportionality that prevents one current from seizing all power, constitutional reform or election of a constituent assembly to draft a new constitution and within what timeframe, establishment of a parliamentary or semi-parliamentary system, secularization and status of religion to prevent its political instrumentalization by any party whatsoever, both in mosques and in other spaces, etc.).
The purpose of this contribution, carried out in connection with an approach to the European Parliament and the Brussels Commission, focuses on the economic issue and its social implications in the context experienced by Tunisia during this transition period. At the invitation of the European Foundation for Democracy and European parliamentarians to a meeting that we were not all able to attend,3 the exchanges in Brussels with deputies and representatives of different European countries at the Commission, focused on the Tunisian revolution, on its democratic stakes not only for Tunisia, but also for the entire southern shore of the Mediterranean, and for other regions of the world, as well as on the threats weighing on its future, both internally and externally.
It was also an opportunity to emphasize the economic and social risks that should not be neglected, because the crucial problem in Tunisia is employment, particularly that of young people. It is important to recall in this regard that the issue of employment, particularly in the disadvantaged regions of the South and West of the country, was the main origin of the uprising that led to the fall of Ben Ali.
This issue is closely linked to the economic situation which was already precarious before the revolution, among other things because of the placing of the country's wealth under the control of mafia clans, but also because of the effects of the global crisis and the exhaustion of the Tunisian "economic model". Whatever efforts are made during the transition period, and even after, we must expect a difficult situation which, if solutions to safeguard existing jobs and create new jobs are not found, risks exacerbating the social crisis.
During the transition period, the country must expect the following difficulties:
1) The tourist season for the year 2011, at least, risks being compromised; whereas tourism provides between 350 to 400,000 direct or indirect jobs (for 2010, foreign exchange earnings are estimated at €1.8 billion)
2) Many foreign direct investments that were planned before the uprising are likely to be cancelled, or at least postponed, until final stabilization. No significant new foreign direct investment will be made during 2011. Foreign direct investment employs nearly 150,000 people,
3) Most state-owned companies will be destabilized by necessary changes in management and will need to be reorganized; the new managements will focus on current operating expenses and on managing social relations in these companies; they will very likely defer planned investments in 2011. This risks reducing any foreseeable growth to zero.
4) To avoid worsening the living conditions of the most vulnerable social groups, the state should increase subsidies for basic products, through the compensation fund; these subsidies are currently around 1.7 billion dinars/year, in addition to subsidies on hydrocarbons, which amount to 900 million dinars/year. This increase seems unavoidable given the global situation, which is resulting in generalized increases in the prices of raw materials, particularly those of food and hydrocarbons. This increase will impact the state budget, and probably increase, at least for 2011, the budget deficit.
5) Tunisia's rating has deteriorated significantly, wrongly, due to the inconsistency of rating agencies, supposedly because of the situation the country is experiencing. This will result, at least, in an increase in the cost of public debt, if not in a reduction in the capacity to raise funds on international markets.
6) The foreseeable decrease in economic activity in 2011 will necessarily result in a decrease in tax revenue.
7) The banking sector risks having difficulties linked to the economic context mentioned above, as well as to the numerous dubious transactions carried out often without real guarantees by the fallen clans and their allies; this will weigh on the banks' accounts and their capacity to finance the economy.
8) The state will be required to provide emergency aid to vulnerable social groups (unemployment benefits, aid to disadvantaged people...), aid to companies in difficulty to maintain employment, cost of repairing damage to public property, all of which will contribute to increasing public spending. These difficulties will very likely severely limit the capacity of the state and private economic operators to respond to the main demand of the movement that has transformed into a revolution.
We may have here one of the reasons why this issue is little discussed in current debates.
Among the commissions set up, none, to our knowledge, is devoted to this issue of the economic and social challenges that await us and which must be the priority of priorities if we do not want to go towards new disappointments and explosions of despair. To meet this challenge, public authorities and private economic operators must mobilize all energies and means to preserve existing jobs and quickly create new jobs, particularly for young people and in the disadvantaged regions of the West and South from where the uprising started. The UGTT must play an essential role in organizing social dialogue and channeling often legitimate demands from employees, but taking into account the country's current possibilities. The protection of the tools of work and the continuity of services, the security of property and persons which are the basis of any democracy are fundamental conditions for the future of Tunisian society.
In the current situation, the priority is not to rapidly and massively increase wages, however legitimate this may be, but to preserve existing jobs and to take into account the demand for work from those who do not have any. To cope with the situation facing the country, ideas and proposals are not lacking.
It is important to recall that two years ago another uprising, for the same reasons, lasted several months in the Gafsa mining region (particularly in Redeyef). Despite calls from trade unions, autonomous expressions of civil society to respond to the demands of this uprising, the power responded with repression, contempt and broken promises.
The Economic and Social Studies Office of the UGTT and the opposition parties that supported this movement made concrete proposals for the development of the regions concerned and to take into account the legitimate demands of the population. A large number of these proposals coincide with the plan presented by Minister Afif Chelbi, recognized for his integrity and competence, but the plan was rejected out of hand because it was considered too costly and did not correspond to the priorities of the Carthage Palace.
The social and political cost of its rejection was not taken into account despite warnings from trade unions, the opposition, the Human Rights League and other expressions of society, not to mention international alerts going in the same direction. It is urgent to return to the proposals and the plan rejected two years ago, to update them, to draw inspiration from them and to respond without delay to the expectations of a population that no longer accepts being excluded from the country's development.
To this end, the transitional government must revise its priorities, mobilize maximum internal and external resources to create conditions that encourage the establishment of businesses and employment-creating activities in the regions concerned, set an example by devoting a significant share of public investment to more equitable regional development and capable of quickly creating jobs where the need is most urgent.
It is certain that Tunisia, due to the difficulties of the situation listed above, will not be able to alone meet the major challenge of employment and development of disadvantaged regions. It will not be able to rely on the aid of the governments of its wealthy neighbours who do not want to see a successful democratic experience so close to home.
The sympathy of neighbouring peoples for the revolution will not be enough to help meet the challenges and meet the urgent needs of the population. The international community and in particular the European Union and more particularly France, the United States and the institutions they control: IMF, World Bank, European Investment Bank..., have an interest in a successful democratic revolution in Tunisia and serve as an example to all the countries of the southern shore of the Mediterranean, in Africa and the Middle East (see the impact of the Tunisian revolution on Egypt).
The European Union must show for this the generosity it has shown in helping the democratic transition in Southern Europe after the fall of the dictatorships of Franco, Salazar, and the Greek colonels, and in Eastern Europe after the fall of the Berlin Wall. Tunisian public debt is estimated at the end of 2010 at 25 billion dinars (less than 13 billion euros), of which nearly 90% is external debt, it represents less than 40% of GDP (in France, public debt represents more than 80% of GDP in 2010).
To meet the challenge of employment and development of disadvantaged regions, Tunisia urgently needs massive external financial support in all its forms. It must also mobilize domestic savings by launching a major national revolution loan (GER). This Great Loan of the Revolution must serve partly to meet social emergencies, but essentially to finance future investments: regional development, infrastructure, technology, research, higher education, etc.
The recovery of all or part of the assets diverted by Ben Ali, his wife and their clans (estimated by Forbes at at least 5 billion dollars, or nearly one-third of Tunisian external debt and the equivalent of half of the country's budget) will be long, despite the goodwill shown by all the European capitals where these assets are invested, but it could serve in the future to reduce the state's debt.
Without serious external aid, the economic situation in 2011, or even 2012, will be critical. We hope that the responses of the countries that will participate in the Carthage meeting in the coming days, at the invitation of the transitional government, will be up to the challenges that Tunisia will have to face. We call on all our European friends, and in particular French and German ones, to put pressure on their own government so that they contribute significantly and positively to the necessary effort.
The European Union in general and France in particular have a strategic interest in the economic and social success of the democratic revolution in Tunisia. They will not lose by contributing to it, whether for their own security, or from the point of view of the development of European economic activity (75% of Tunisia's international trade is carried out with the European Union). France, because of its historical ties with Tunisia, its current situation on the international scene (G20 presidency), its role in the European Union, must be the driving force behind swift and concrete action to provide Tunisia with all the necessary aid so that this revolution is accompanied by economic and social success.
It is necessary to anticipate situations and act quickly; many business leaders, trade unionists, employees, a large part of civil society in Tunisia and the Tunisian diaspora in the world, are ready to meet all these challenges. They need the help of France and the European Union. We must help them and not remain deaf to their call.
Published on February 16, 2011
Posted online on February 21, 2011
