A bitter rift between Tunisia's Islamist-led government and its national trade union is threatening the North African country's stability and highlighting chronic problems of poverty and unemployment.
After weeks of demonstrations and clashes between protesters and police, labour leaders last week called for a nationwide strike, despite a plea by the government to the Tunisian General Labour Union to "listen to reason to spare the country tensions".
In the run-up to the strike, set for Thursday, hundreds of supporters of the moderate Islamist Ennahda party, which dominates the government, rallied in the streets of the capital on the weekend, clashing with union members and Tunisians disillusioned with the government's failure to provide jobs.
Almost two years since uprisings in the poorest parts of central Tunisia sparked protests that felled president Zine El Abidine Ben Ali, the democratically-elected government that succeeded the autocrat is struggling to solve the economic problems that prompted the upheaval and has been unable to contain the roiling unrest.
The weekend clashes that rocked the capital were seen as an escalation of violent unrest that began last month with demonstrations in Siliana. This rural town of 25,000 people, south of Tunis, is far from the richer coastal areas and close in geography and circumstance to Sidi Bouzid, where riots that became 2011's Arab uprisings began with mourning for a frustrated fruit-seller who burnt himself alive.
In Siliana, thousands of people protesting the lack of jobs marched to the local governorate building on November 27, where they were met by police who fired birdshot - small lead pellets - into the crowd, wounding more than 200 people, including 20 now at risk of permanent damage to their sight, according to a report by Human Rights Watch. The organisation also reported unconfirmed claims that 72 members of the security forces were injured by protesters throwing rocks.
"We asked the government to invest more and create jobs here, they answered by shooting us. It is like a war, police vehicles crossed the city while shooting at us; we are not animals," said one of the protesters, in footage shown on Tunisian television.
The incident highlights the tension between demonstrators and police, known for their brutality under Ben Ali, but also the miserable state of the economy. Analysts blame the government's lack of experience, the gravity of the problems and the readiness of the ruling coalition to become distracted by political spats.
"I think the government has made a valid effort to improve the economy, but there have been shortcomings," said William Lawrence, of the International Crisis Group. "The Arab Spring happened in Tunisia because of lack of jobs for rural and remote populations and for young people...and it happened because of corruption and nepotism."
Neither of these problems, he said, have been addressed adequately either by the government or by a plan by the World Bank, which last month announced a US$500m (Dh1.8m) loan designed to support good governance and job provision.
According to a report by the Bank issued in October, there have been some improvements in the Tunisian economy. Although it contracted by two per cent in 2011, it is predicted to recover overall this year - largely due to tourism regaining much of its momentum - and poverty levels has decreased from 32.4 per cent in 2000 to 23.3 per cent.
But these figures mask rising unemployment, which soared to 19 per cent in 2012, and is at 35 per cent among 15- to 29-year-olds, and particularly the stubborn inequality between urban and rural areas. Only about nine per cent of people in the capital are without work, according to the report, but the figure is as high as 32 per cent in parts of the central west of the country.
A sharp rise in the international prices of food and fuel have hit poorer Tunisians hard, said Lachen Achy, a resident scholar at the Carnegie Middle East Centre, while the financial crisis in Europe, a key partner for Tunisian trade, has affected exports. But, he argued, while the margin for the government to solve the problems was limited, it could have done more.
Much of the focus of the debate among lawmakers, most of whom have never been politicians before and lived in exile or prison for years, has centred around issues such as the role of Islam in the constitution and the tensions between religious, ultra-religious and secular political factions, rather than on the economic heart of the country's problems.
"This is due to the absence of management of economic issues," Mr Achy said. "There is more focus on political issues, but not economic issues....There is no comprehensive road map on how to address regional imbalances and youth unemployment."
For years, the government has invested heavily in education, meaning that many young Tunisians have college degrees. But they often lack the skills that employers need, meaning that numbers of unemployed graduates are high.
These educated people, said Mr Lawrence, are humiliated by their unemployment and poverty and believe they are treated with contempt by the government.
"That's what the people in Siliana feel - it was the dignity revolution," he said. "They need jobs and they wanted to be treated with dignity by their government."
afordham@thenational.ae
The Details
Article 15
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Jeff Buckley: From Hallelujah To The Last Goodbye
By Dave Lory with Jim Irvin
The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en