With New President, Tunisia Hopes for Economic Stability

01.05.15

With New President, Tunisia Hopes for Economic Stability

01.05.15
Beji Caid Essebsi

By Rami Ayyub for Global Risk Insights

The election of Beji Caid Essebsi as President of Tunisia brings hope for economic stability to a country fatigued by a four-year democratic transition.

Garnering over 55 percent of the vote, Beji Caid Essebsi achieved a decisive victory that gives the Nidaa Tounes party the helm of both parliament and presidency. Largely secular, Nidaa Tounes assumed control of parliament in elections last October, replacing the mainly Islamist interim government that served following Ben Ali’s ouster in 2011.

While fairly decisive, the contentious presidential election underscores the lingering divisions among the Tunisian public. Coming in second was Moncef Markouzi, the three-year interim president tasked with bringing stability to Tunisia following twenty years of dictatorship.

Markouzi, whose coalition includes Tunisia’s main Islamist parties, warned that Essebsi’s victory allows one party to dominate Tunisian politics once again. It is unclear how true these expressed fears are. Essebsi, who served as a senior official under Tunisia’s past two autocrats, is still seen by many Tunisians as a haunting reminder of the country’s authoritarian past.

The newly elected president claims, however, that his 40 years of experience will provide the security and economic stability the interim government could not deliver. And Tunisians, fatigued by three years of political transition, have demonstrated they prefer a leader with a “strong hand” who is able to stabilize the country

“A strong hand”

According to recent polling by the Pew Research Center, Tunisian confidence in democracy has waned since the moderate Islamist Ennahda party assumed interim control of the government. Just 38 percent of Tunisians favor a democratic government over a leader with a “strong hand,” down from 61 percent two years ago.

This likely gave rise to Essebsi and his party, which is comprised largely of trade union leaders, businessmen, and members of the old Ben Ali regime.

Much of the public’s discontent with the interim government has to do with the deteriorating Tunisian economy. With foreign investment declining and unemployment on the rise, 88 percent of Tunisians describe the country’s economic situation as negative.

A lack of opportunity and increasingly disenfranchised youth have forced large swaths of the population into smuggling and illicit trade, mainly with neighboring Libya. And with the security situation in Libya deteriorating rapidly, many in Tunisia worry that the conflict could spill over the border.

Reforming the old regime

Tunisia’s economic struggles are largely a result of the policies of the former Ben Ali regime.

According to a recent report by the World Bank, few of these policies have changed since the country’s democratic transition; Tunisia’s investment policies, for example, restrict potential new investment to less than 50 percent of Tunisian GDP, effectively closing off dozens of sectors to any meaningful investment or competition.

Companies routinely spend up to 13 percent of annual sales making informal payments to the government, which has fostered public-private partnerships rooted in corruption and coercion.

This patronage-based economy in Tunisia stands to be significantly reformed by the much-lauded new Tunisian constitution, which emphasizes the principles of transparency and neutrality in justice and law.

Meaningful reform, however, will depend on commitment from President-elect Essebsi and the Nidaa Tounes party, who will have to unseat the many vested interests satisfied with the Tunisian status quo.

Any commitment to economic reform can bring new foreign investment to Tunisia, and help to break the barriers to economic inclusion that have driven youth unemployment to its highest point since the revolution.

New partnerships with its neighbors in the Arab Maghreb Union would spur investment in Tunisia’s telecom and industrial sectors, creating legal employment opportunities and encouraging confidence in Tunisia’s economic vitality. Lucrative, ambitious projects such as Tunisia Economic City only stand a chance if Essebsi and his new administration remain committed to the economic reforms Tunisia desperately needs.

Still, the concerns of outgoing interim president Markouzi remain paramount. With one party in control of both parliament and the presidency, Essebsi must remain committed to the principles of political inclusion that have evaded governments in Egypt, Libya, and Iraq. Tunisia’s democratic transition – and economic future – will depend upon the new President’s willingness to embrace the opposition.

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