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Tunisia's Democratic Success Has Not Lifted Its Economic Malaise

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Stunning developments in Tunisia just might enable it to continue as the only successful graduate of the Arab Spring and a beacon of hope across the Arab World. While other Arab nations descended into violence or reverted to dictatorship, often worse than what had gone before, Tunisia transitioned from dictatorship to democracy in a relatively peaceful fashion.

That itself was a miracle, but Tunisia's democratic success has not lifted the economic malaise that triggered the Arab Spring protests and continues to fuel discontent. Western media interpreted the Arab Spring as a drive for democracy, but protesters were mainly motivated by lack of opportunity and jobs in dead crony-capitalist and crony-socialist systems. Tunisia's economy has gotten worse since the Arab Spring, beset by strikes, a tourist industry hobbled by terrorist attacks, and failure to make meaningful reform.

Fortunately, Tunisians recognize the challenges. During a recent visit to Tunisia, I heard both leaders and average Tunisians say they had devoted the first five years after the Arab Spring to democracy; and the next five years would centre on economic reform, specifically free market reform to liberate Tunisians from the cronyism that has suppressed Tunisian entrepreneurship, opportunity, and prosperity.

Yet, the three power blocks that arose out of Tunisia's Spring, at first glance, appear to be against or indifferent to reform.

The Islamic Ennahda Movement, an offshoot of Egypt's Muslim Brotherhood under the charismatic leadership of Rached Ghannouchi, was formed to push Islamic values, not economic freedom. Like the Brotherhood, Ennahda narrowly won the first post-Arab Spring election. However, when protests turned violent, it resigned power to maintain peace.

The Tunisian General Labour Union (Union Générale Tunisienne du Travail--UGTT), is wed to old-fashioned leftwing dogma, retaining the benefits its leaders gained under the Ben Ali dictatorship, and protecting a privileged union membership that excludes the disadvantaged through inflexible labour laws.

Finally, there are former members of the pampered elite, who helped form Nidaa Tounes, a secular party with little policy other than opposition to Ennahda. Nidaa is led by another charismatic leader, Beji Caid Essebsi, now president of Tunisia.

The barriers of privilege hobbling business and workers alike must be torn down.

All three factions will need to make sacrifices to save the Tunisian economy, and the biggest mover may surprise Westerners used to negative stories about Islamic parties. It's Ennahda, which invited me to visit Tunisia to meet political and civic leaders, and speak at a seminar on the future of Tunisia.

Here's something remarkable. When I arrived in mid-April, Ennahda was an Islamic Movement; when I left five days later, it was a "normal" political Party. During its conference, members (by a large majority) set aside political Islam at the urging of Ghannouchi. The party continues to look to religion for moral guidance, as do many Western parties, but no Ennahda official may now also hold a position in the mosque.

Ennahda may also be the first major Arab political party to put free market policies at the centre of its platform. I attended the opening rally of the conference and was provided headphones for translation. Here's one of the many perceptive things the 74-year-old Ghannouchi said to the cheering crowd. "Wealth should no longer be made in government; wealth should be made in the private sector."

This neatly captures the problems plaguing Tunisia's economy and plots the path forward.
Tunisia has been a society intent on milking the state rather than productive activity, which creates sustainable prosperity in a free economy. The barriers of privilege hobbling business and workers alike must be torn down.

Nidaa seems to be on board. Remarkably, Ennahda's old foe, President Essebsi, gave a keynote speech at the Ennahda opening ceremony calling for an end to privilege and transformation to a free market economy. He received an enthusiastic welcome.

However, the UGTT, which played a pivotal role in the democratic transition, now seems interested in cementing its power, privilege, and old-fashioned ideology. Over 150 strikes in 2015 doubled the workdays lost compared to the year before; it demands wage increases and exceptional promotions that have no relation to productivity, eroding the nation's competitive position; and it uses its muscle to maintain job market restrictions.

But it's worth recalling that not so long ago, Tunisian factions, including the UGTT, put aside their differences for the sake of their people. If there is a place where a miracle can strike twice, it may be Tunisia.

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