Over the past decade, numerous international organisations and institutions regularly exhorted developing countries to follow Tunisia as a model of economic success and stability. Ludovic Lamant asks how could they have got it so wrong?
The Tunisian revolution has ridiculed the expert studies and reports that regularly lauded the good governance and economic performance of this North African country ruled for 23 years by former president Zine al-Abidine Ben Ali. For after a month of widespread protest that began in mid-December, Ben Ali was toppled on 14 January by popular exasperation at dire living conditions and human rights abuse, and notably over the spiraling price of basic foodstuffs.
"There is a total discrepancy between the portrait presented by international institutions and the marked trends of the Tunisian economy," commented Karim Bitar, associate researcher with the Paris-based Institute of International and Strategic Relations, IRIS.
The revolt in Tunisia is rooted in a long-simmering movement, and notably in the southern mining region of Gafsa, where more than half of the active population, Good economic management and social policies continue to bear fruit, as evidenced by accelerated growth and improved social indicators."
Reporting on Tunisia in 2010, the IMF warned of short-term dangers of the economic crisis, and that "boosting employment" was a key medium-term challenge" but reassuringly noted: "Over the past two decades, the North African nation has undertaken wide-ranging structural reforms aimed at enhancing its business environment and improving the competitiveness of its economy. These reforms, accompanied by prudent macroeconomic management, have reduced the Tunisian economy's vulnerability to shocks-including the global financial crisis-and provided more options for the authorities to respond to them."
Meanwhile, the United Nations, in the 2010 edition of its Human Development Report which it describes as a "composite national measure of health, education and income for 169 countries", found that "in terms of the improvement in its human development index" Tunisia was "a success". The preamble to the 2010 report noted that "for the first time" the study "looks back rigorously at the past several decades and identifies often surprising trends and patterns with important lessons for the future."
A censored World Bank report
During a visit to Tunisia in 2008, IMF Managing Director Dominique Strauss-Kahn received a civil decoration from the hands of Ben Ali of "Grand Officer" of the Tunisian Republic. In this video showing a Tunisian television report (in French) of his visit, Straus-Kahn says Tunisia's "economic policies are healthy and I think it is a good example to follow for many emerging countries," before concluding: "The judgment of the IMF towards Tunisian policies is very positive [...] and in Tunisia, things will continue to function correctly."
Not a word was uttered by the IMF chief about the clan-like structure of a corrupt economy placed at the service of Ben Ali's close entourage, nor about the vast social inequalities between the population of its coastal region and those inland.
Indeed, the country's capital Tunis, lying on its northern coastline, was ranked 55th best place to invest in the world by the World Bank. That made it one of the top investment attractions among African countries, along with the Mauritious Islands, thanks notably to its fiscal policies towards businesses (see Doing Business, 2011)
In the World Economic Forum's Global Competitiveness Report 2010-11, Tunisia climbed eight places on the 2009-10 edition to reach 32nd position. The report gives countries an overall score, averaged from individual scores against a wide list of criteria, including ‘Transparency of government policymaking' (here Tunisia ranked 20th worldwide), ‘Public trust of politicians (15th worldwide) and ‘Ethics and corruption' (18th).
In a good governance in Africa index compiled by the highly reputed Mo Ibrahim Foundation, often cited by The Economist magazine, Tunisia figured in 8th position, just behind Ghana. That put it ahead of all its North African neighbours, with Egypt in 11th position, Algeria at 14th, Morocco at 16th and Libya 23rd.
The Tunisian revolution raises a very significant question for international institutions; how could they have ignored to such a degree the clear cracks in an economy incapable of sufficient re-distribution of the fruits of its growth, and this to the point of implosion? Why was there no trace of criticism of the nepotism that ravaged the country?
"While there is no shortage of economic indicators, those about social issues were the object of a complete black-out by the authorities," said Mohammed-Ali Marouani, an economics professor with the Paris-1 University. "That is how one of the decisive trends of the period was passed over, namely the explosion in unemployment among the young, in the most underprivileged regions far from the coast."
Karim Bitar, of IRIS, believes "one of the lessons of this crisis is that the indicators systematically placed at the fore are partial, even completely misleading."
Indeed, the sacrosanct indicator that is the Gross Domestic Product (GDP) has been, in Tunisia's case, impressive. It progressed by 3.1% in 2009, despite the international economic crisis, and by 3.8% in 2010. The IMF even predicted, before the fall of Ben Ali, a growth of 4.8% in 2011. The deficit slightly worsened by around 3% due the effects of the downturn, but the national debt fell in 2009, to 42.8%. Inflation in 2010 was 4.5%, compared with 5.5% in Jordan, and 10.9% in Egypt. Such figures were, for the experts, the illustration of a very solid situation.
"Tunisian economic growth is strong, but it could be a lot better still," said Moncef Cheikh-Rouhou, professor of managerial economics and international finance studies with the Paris-based HEC management school, a Tunisian national with close links to the opposition movement. "In a report by the World Bank, it is said that, without the corruption of the regime, the growth rate would be higher by at least two points. But this report was not published due to pressure from the authorities."
Democracy and economic progress
Behind these falsified or erased statistics, lie the flaws of the Tunisian economy. Dynamic it may be, but too little diversified and too dependent upon Europe which accounts for more than 70% of both its exports and imports (and 80% of its tourism industry). While the number of higher education graduates continues to rise following considerable investment in education over recent years, unqualified posts, notably in tourism and agriculture, still account for too large a part of employment overall. This has produced an employment bottleneck for graduates. About 70% of all the unemployed in Tunisia are aged under 30.
Lahcen Achy, a research scholar with the Beirut-based Carnegie Middle East Center, is the author of a November 2010 study ('Trading high unemployment for bad jobs: Employment challenges in the Maghreb') on youth unemployment in the Mahgreb countries. He argues that the blindness shown by international institutions in face of Tunisia's chronic problems is down to international strategies. "Relations with Tunisia have always been marked by a great deal of diplomacy," he commented. "It is a question of providing a model, including its relationship with Islamists, even if that means overlooking certain economic problems."
The recent events in Tunisia have brought back to the fore a question that Nobel prize-winning economist Amartya Sen appeared for many to have already answered, and which international organisations are dancing around without openly affronting; does the absence of democracy handicap a country's economic drive? The UN's 2010 Human Development Report noted that "Tunisia has had the same president for the past 23 years, while Nepal just abolished its monarchy after protracted political conflict. Indonesia and Oman made much of their progress in health and education under authoritarian rule. In Bangladesh, despite several governance setbacks [...] Clearly, an amazing variety of institutions are compatible with human progress."
"We had already heard that one during Pinochet's time, the idea that democracy is not necessary for economic progress," commented Karim Bitar. "That was how Ben Ali was given the nickname Zinochet."
It remains to be seen whether the Arab countries neighbouring Tunisia, with regimes more or less authoritarian, could, having shaped policies on the Tunisian economic model, now find themselves on the same path towards revolt. While none of the economists interviewed here believed that will be the case in the short-term, due to the strength of the army in Algeria and the influence of the United States in Egypt and Jordan, they saw it as a now irreversible process over the medium-term.
1: The nickname Zinochet is a play on the last name of former Chilean dicator Gerneral Augusto Pinochet and the first name of former Tunisian president Zine al-Abidine Ben Ali.