TUNIS // Taher Mestiri was a 31-year-old IT manager with a tourism company in the coastal city of Sousse when the 2011 revolt overthrew the authoritarian regime of then president Zine El Abidine Ben Ali.
As unemployed young men in provincial towns took to the streets, he could identify with their rebellion.
“In those days we were not free. It was like being in a trap,” he recalls. “Websites the authorities didn’t like were blocked. There was a constant feeling of being under surveillance when you used the internet.”
He never thought seriously of setting up his own IT business.
At that time, Tunisia was shunned by international investors who knew they could not count on the neutrality of the courts if there should be any disputes with the Trabelsis, who were the president’s in-laws, and who had interests across sectors, including the auto and cement industries.
Now, Mr Mestiri is an internet entrepreneur operating in a very different environment. Issues affecting the sector are open to public debate, he says.
In this new can-do environment, he managed to secure foreign funding for his start-up via a Tunis investment fund.
Unlike Syria and Libya which veered into disastrous instability after the 2011 revolutions, while Egypt saw a return to authoritarianism, Tunisia is regarded as an example of progress towards democracy.
Elections last year produced a parliament that is expected to be a real political counterweight to the prime minister’s office, while the powers of the presidency have been cut back significantly.
The country is under pressure, however, to set the pace on economic reforms capable of generating more jobs for the restless young.
A World Bank report released in September, said lingering protectionism and non-competitive practices are still slowing investment in Tunisia.
Cronyism and rent-taking practices did not disappear with the 2011 revolution, said the report entitled The Unfinished Revolution.
“Sector lobbies have been successfully fighting to keep privileges and rents at the expense of greater investment across the country,” it said.
Since the revolution, the World Bank has disbursed a series of development policy loans totalling US$1.25 billion to Tunisia, with another $500 mln in the pipeline this year.
The International Monetary Fund has continued with funding that started before the revolution. Both bodies are advising Tunisia on how regulations could be changed or eliminated for a clearer investment environment.
The “increased competition” advocated by the World Bank calls for the rules to be “transparent and fairer”, and for “institutions in place to make sure that those who are not abiding by the rules are being sanctioned”, Jean-Luc Bernasconi, the bank’s lead economist for the Middle East and North Africa, said. “It’s really about economic democracy.”
“Connections [still] play a very large role in gaining access to credit” from Tunisian banks, the bank’s report said.
If the new coalition government holds together, it will provide the political stability needed to follow through on reforms, Mr Bernasconi said.
Habib Essid is the sixth prime minister since the 2011 revolution.
Still, Tunisia’s economic challenges are far from over, as the public sector battles a ballooning payroll, while credits granted in the tourism sector under the old regime continue to weigh on state-owned banks.
Underlying all this is the continued rumble of youth unemployment, which has contributed to the radicalisation of thousands of Tunisian young people who have joined militant groups abroad.
Instability in neighbouring Libya also means an uncertain short-term outlook — and not just for tourism which is an important source of foreign exchange.
On a brighter note, lower oil prices will give the government a little more margin for manoeuvre, the International Monetary Fund says.
The World Bank report triggered some pushback, from Tunisian leftist parties and also from former policymakers under Mr Ben Ali, who spoke out in defence of their record.
Afif Chelbi, industry minister from 2004 to 2010, said that before the revolution, government policies were effective in boosting exports and increasing added-value in industrial products. Attempts were made to bring industrial jobs to inland provinces “although this clearly was not sufficient”, he wrote in a strongly worded critique of the World Bank report.
It is now generally acknowledged that in the final decade of the Ben Ali regime, an intimidated media and a rubber-stamp parliament turned a blind eye as the Trabelsis extended their predatory practices across the economy.
Mr Chelbi is now a member of Nidaa Tounes — the party with old-regime links that emerged as winner in last October’s parliamentary election.
He conceded that “unacceptable rents” are still being extracted through parts of the service sector sheltered from competition. He argues that liberalisation should be gradual, and not all the World Bank recommendations should be accepted unquestioningly.The small leftist parties that make up the Front Populaire – the largest opposition bloc in the new parliament – disagree with the World Bank on policies such as reducing fuel subsidies.
However the bank’s analysis of the structural ills of the Tunisian economy is overall “a good diagnosis”, said Houcine Rhili, the bloc’s economic spokesman.
“In fact, we regard the report as a self-criticism by the World Bank” which has now — in contrast to before the revolution — identified excessive red tape as providing a fertile environment for cronyism and corruption, he said.
Tunisia’s progress in moving on from authoritarian rule reflects a certain legalistic tradition that survived decades of authoritarianism, the priority given to education through those years, and an army that avoids politics and has no economic role.
For democracy to take hold, new jobs for the younger generation need to be created at a faster pace.
There is no room for complacency, economists say. Tunisia must not let up on efforts to eliminate cronyism and corruption in order to create a level playing field.
foreign.desk@thenational.ae
