Tunisia may be home to the Arab Spring, but the contortions of its political economy mean that most Tunisian’s are giving up on democracy. If it to remain a deferred model for Muslim governance throughout the Arab world, then Tunisian’s themselves must move in the direction of Poland’s Solidarity movement. Fixing a moribund economy isn’t easy, but it remains the sine-qua-non for development.
The last seven years have failed to revive the economy; nine government in seven years isn’t stability, but IMF loans totaling $2.9 billion need to be received, these are dependent on domestic reforms that are deeply punishing. The Tunisian social base is unsettled and seeks comity. Youssef Chabad, Tunisia’s prime minister has sought subsidy reductions and tax increases to eliminate a crushing deficit the eats away at 6% GDP. No nation state can survive with these fiscal realities. For Tunisia to survive, it must realign the sources of its domestic competitive advantages in tourism, the consequent hard foreign currencies tourism brings and union reform.
Previously, it was state oil that hired even when output plummeted. Over 20% of Tunisia’s public sector employees consume over 14% of its GDP. Shrinking governments share of the private sector is difficult, especially when alternatives don’t exist. Rent seeking and strong domestic barriers for entry remain. Tunisia must open itself up to globalized capital flows for alternatives to emerge. The Tunisian economy has plenty of revenue from oil, gas and phosphorus. These need to be economized and exported to meet new arrangements of scale.
Two points to consider going forward: Tunisia suffers from great social, economic disparities between its interior and littoral regions. Its commodities are extracted from the interior but require transport toward its littoral for consumption and export. Infrastructure is needed to economize this relation as well as Tunisia’s fine relations with France.
American, the EU and France should accommodate Carthage with loans and market access accelerating Tunisia’s badly needed reform movement.
Tunisian’s acted boldly in choosing a revolution that consummated the Arab Spring, but it is growing weary of democracy and the ballot box. Its not to late to save the social, political aspirations that made Tunisia’s Arab Spring.
William Holland
William Holland 