Business

Viewpoint: Tunisia at risk

  • 17 December 2012
  • From the section Business
Shoppers at a supermarket in Tunis, 12 November 2012
Image caption Food prices are rising in Tunisian supermarkets

Two years have passed since poverty-stricken Tunisians began an uprising that ejected their corrupt ruling family and sparked revolution across the Arab world.

Since then, the Tunisians have held orderly elections, ushering in a coalition government, and made progress on drafting a new, democratic constitution. But all is not well and Tunisia today stands at the crossroads. Both economic and political factors are at play.

The economy is drifting, becoming ever more hostage to politics. Strong headwinds from Europe, which absorbs 75% of Tunisia exports, make the challenge of economic recovery more difficult.

Escalating disputes between the labour unions and employers are threatening to derail economic recovery: workers argue they are seeking rights which were denied by the ousted regime, while business leaders and foreign investors say union demands are impossible to meet.

German car supplier Leoni is negotiating the closure of one of its largest plants, south of Tunis. Other investors are putting new investment on hold until uncertainty abates.

Unemployment has climbed from 14.9% to 18% since December 2010 and food prices are rising. The current account deficit will amount to more than 7% of GDP for the second year running and capital flight is on the rise. The estimated 2% rebound of GDP this year is hardly noteworthy when compared with the 1.5% decline last year.

Economy deteriorating

The government's decision to sack the respected governor of the central bank, Mustafa Nabli, in June was followed by the resignation of the minister of finance, Houcine Dimassi, who accused the government of being "more concerned about winning votes than about the health of public finances".

The Islamist Ennahda-dominated government seems unconcerned about the deteriorating state of the economy. Will the US, the EU and multinational institutions continue to support Tunisia to the tune of $1.3bn, as they have done these past two years?

The Islamist Ennahda party, supported by Qatar, which now rules in coalition with two smaller parties, including the Congress for the Republic party of President Moncef Marzouki, has done little to stop the escalation of violence which led a mob of its supporters and bearded flag-burning zealots to attack the US mission and burn the American school in Tunis two months ago.

Image caption The central bank's governor was fired on 27 June

A videotape showing the paramount leader of the Islamists, Rachid Ghannouchi, meeting and apparently co-ordinating policy with the same Salafists - some of whom have the support of Saudi Arabia and call for all foreign investors and tourists to be banned from Tunisia - has humiliated a force once seen as unstoppable.

Beji Caid Essebsi, one of Tunisia's first post-revolution prime ministers, has succeeded in pulling badly fragmented liberal and leftists forces together since he founded the Nidha Tunes (The Call From Tunis) party four months ago, while Islamists' recent missteps and thuggery have eroded their popularity. Mr Essebsi called the death of one of his party's senior officials, Lotfi Naguedh, a "political assassination".

Mr Naguedh's death last month came days before an Amnesty International report spoke of human rights "being reversed". Tombs of local Sufi shrines, such as the Sayida Manouba in Tunis, are being destroyed by Salafist zealots, in a pattern all too familiar in neighbouring Tripoli and Timbuktu.

Drift into violence

As it battles to impose censorship on the media, the government last summer appointed a former police officer who had been condemned for corruption and barred from holding public office, Lotfi Touati, to run the state-owned Assabah press group. This prompted some of the journalists to go on hunger strike.

The first-ever general strike of journalists in the history of the country followed. Despite these pressures, new websites offering high-quality news such as Kapitalis, launched by experienced journalist Ridha Kefi in 2010, are flourishing.

The recent drift into violence has confirmed that the Islamists have organisational capacity, popular support and international connections which their opponents appeared to lack. In Tunisia, however, the strength of liberal and leftist reaction is becoming more evident by the day, as many men and women are prepared to fight for what they believe is a modern vision of their country, whose founder, Habib Bourguiba, granted women equal rights in 1956.

Rachid Ghannouchi is the true puppetmaster of the Tunisian government. Ahead of last year's elections, he threatened to order troops onto the streets of Tunis if the minimum threshold of votes he expected Ennahda candidates to receive did not materialise.

Now he warns that Nidha Tunes supporters are "more dangerous than Salafists". Were this exercise in calculated ambiguity to continue until the general elections announced for June 2013, the damage to the fabric of Tunisian economy and body politic would be enormous.

Francis Ghiles specialises in security, financial and energy trends in Europe and the Western Mediterranean. He is a frequent commentator in print and broadcast. He was the Financial Times North Africa Correspondent from 1981 to 1995. The views expressed in this article are his own and not those of the BBC.

This article was altered on 17 December 2012 to correct factual errors and add a short biography of the author.