Tunisia’s President Must Boost Economy Without Repeating Mistakes of the Past

COMMENTARY Africa

Tunisia’s President Must Boost Economy Without Repeating Mistakes of the Past

Dec 24th, 2017 3 min read

Commentary By

William B. Taylor

Executive vice president of the U.S. Institute of Peace

Kim R. Holmes, Ph.D. @kimsmithholmes

Executive Vice President

Key Takeaways

Tunisian government signaled a tough decision last week to reduce the public-sector payroll by 3,000 to lower its budget deficit.

The economic reforms that Essebsi’s government announced this week should kick start growth by reducing government spending and public debt.

President Essebsi has a mandate from his broad political coalition.

The Tunisian government signaled a tough decision last week to reduce the public-sector payroll by 3,000 to lower its budget deficit. This may be a long-awaited sign that President Beji Caid Essebsi is prepared to make the economic reforms his country needs to achieve true stability and sustainable progress in a region that badly needs a democratic success.

The pivotal opportunity that Tunisia’s development presents for the Arab world and for its president brings to mind another Tunisian head of state, the legendary Habib Ben Ali Bourguiba. As the country’s first president in 1957, he enacted sweeping social and economic reforms that catapulted Tunisia into one of Africa’s most literate and advanced countries. 

In leading his nation through independence from France, Bourguiba used social reforms to modernize Tunisia. He pushed the country away from strict Islamic codes, promoted secular social policies and advocated for a modern interpretation of Islam. He prohibited polygamy, expanded women’s rights to divorce and raised the age at which girls could marry to 17.

Economically, his government in the 1960s and 1970s allocated most of the national budget for agriculture, health and education, in turn limiting military spending. Formerly religious schools were put under the government’s oversight.

While this social revolution enabled Tunisia to become one of Africa’s most literate and advanced countries, it also became less democratic. His socialist-inspired economic reforms tended toward central control and large government bureaucracies depressing economic growth and enabling substantial corruption. After consolidating power and driving his opponents out of the only legal political party, Bourguiba in 1975 proclaimed himself president for life. 

The country remained in economic flux as Bourguiba’s centralized and authoritarian political practices led to cronyism, low wages, unemployment and high prices. Finally, in 1987 Bourguiba’s prime minister at the time, Zine el-Abidine Ben Ali, declared the president mentally unfit and too ill to govern and ousted him in a bloodless coup. Ben Ali’s dictatorship came to an end in turn with the Arab Spring in 2011. 

Today, President Essebsi is also pushing a social reform agenda, though more modest than Bourguiba’s. Last month, the government of his prime minster, Youssef Chahed, abolished a law that prohibited Tunisian women from marrying someone who is not Muslim, a freedom that Tunisian men have had for some time. They also took the political risk of abolishing a statute rooted in Sharia law that prevented women from receiving an equal portion of an inheritance. 

The economic reforms that Essebsi’s government announced this week should kick start growth by reducing government spending and public debt. Government wages account for 14 percent of GDP, one of the highest in the world. The public debt has increased sharply to 67 percent of GDP by the end of June, from about 60 percent a year earlier. That is a dangerous trend for a country needing significant private sector financing. 

Nearly 30 percent of this debt is due to inefficient and debt-accumulating state-owned enterprises, including over 50 percent of the markets in gas and electricity, which have weighed heavily on Tunisia’s economy and budget. 

Although economic growth is slowly improving — the International Monetary Fund said in August that it would reach 2.3 percent this year — Essebsi must restart the reform process to open Tunisia’s economy to more international investment, private-sector growth and job creation.

Essebsi has a chance to achieve historic milestones with economic reforms as well as social changes. With a new cabinet in place and a power-sharing agreement between his secular Nidaa Tounes party and the moderately Islamist Ennahda opposition, he has the leverage to drive back the growing cynicism and frustration of the post-authoritarian era and propel Tunisia forward. Bourguiba stained his legacy with an authoritarian turn. Essebsi can avoid this mistake by supporting economic reforms with democratic openness. 

The president faces big challenges. The instability in neighboring Libya intensifies the pressure on Tunisia’s economy and state budget, as fleeing Libyans can enter Tunisia visa-free. Those who cross the border to work and establish businesses compete for jobs and housing, while those who remain unemployed further strain government services and subsidies. 

Essebsi must ensure that Tunisia’s interior regions — where two-thirds of Tunisia’s 11.5 million citizens live — are involved in the reform process and benefit from the growth. Like Bourguiba, he comes from the elite secular class and must be careful to avoid reforms that only benefit the coastal regions, where economic activity already accounts for more than 85 percent of Tunisia’s GDP. 

Doubts about democratic advances resurfaced when the parliament this year adopted a law granting amnesty to civil servants who served in Ben Ali’s regime and were implicated in corrupt practices like those that spurred the anger of Tunisia’s 2011 revolution.

President Essebsi has a mandate from his broad political coalition. He should emulate the best of Bourguiba while avoiding the worst. He can seize the opportunity to lead the country toward a “New Tunisia,” while avoiding the corruption, heavy-handed political tactics and centralizing tendencies of the past.

This piece originally appeared in The Hill on 10/25/2017