Tag: tunisia

Two Lessons from the Tunisian Election

The victory of the secular party Call of Tunisia (Nidaa Tounes) in the parliamentary election on Sunday carries two lessons for observers of transitions in the Middle East and North Africa (MENA). The first one is broadly optimistic, but the second one should be a cause for concern, heralding economic, social, and political troubles ahead.

1. The Arab Spring was not a one-way street to religious fundamentalism.

In spite of the unexpected and often violent turns that political events have taken in countries such as Syria or Libya, the revolutions across the MENA countries were not just thinly disguised attempts to impose theocratic rule on Arab societies. While Islam is an important cultural and social force, most people in the region have little appetite for a government by Islamist extremists. In fact, much of the headway that Islamist politicians made shortly after the fall of authoritarian regimes in the region can be explained by their track records as community organizers or providers of public services.

Tunisia is a case in point. Already in 2011, the country’s leading Islamic party, Ennahda, featured numerous women candidates in the election, and following a political crisis last year it negotiated a peaceful handover to a caretaker government that led the country to yesterday’s election.

Tunisia’s new leading political force, Nidaa Tounes, may have gained as many as 80 seats in the 217-seat parliament. It describes itself as a ‘modernist’ party. It unites secular politicians of various stripes, including labor union members, or former officials of the regime of president Zine el-Abidine Ben Ali. The leader of the party, the 87-year old Beji Caid el-Sebsi (who served as interim prime minister in 2011) had a long political career prior to the revolution, including an ambassadorship in Berlin after Ben Ali’s ascent to power.

2. Don’t expect radical economic reforms.

For those who feared that democratization in the MENA region could bring about theocracy and extremism, the status-quo nature of Nidaa Tounes is probably good news. At the same time, however, it seems unlikely that the party, whose sympathizers largely overlap with those of the country’s influential labor unions, will bring about the deep institutional and economic changes that Tunisia needs in order to extend access to economic opportunity to ordinary Tunisians by dismantling Byzantine red tape and corruption and freeing up its economy.

For example, while it is certainly praiseworthy that the party has promised to improve the economic situation of women, one should worry that it plans to do so by what are likely to be popular yet ineffective measures: creating a new government bureau fighting discrimination, investing in social housing for young female workers, and extending statutory maternity leave.

More importantly, in many areas the exact economic platform of Nidaa Tounes remains blurry. The party promises to foster consensus among the government, civil society, labor unions, and employers. It also promised to cut public spending – in part by reforming the system of fuel subsidies – increase industrial exports and promote industries with high value added, most notably hi-tech and renewable energy, and to subsidize economic development in poorer regions by an amount of 50 billion dinars ($28 billion) over the next five years, 30 billion of which would be coming from the public budget.

Heavy on clichés and light on specifics, these promises are reminiscent of electoral manifestos of social democratic parties of Europe. Regardless of whether that would be a good thing under normal circumstances, what Tunisia needs now is a bold agenda of economic liberalization, as well as a Leszek Balcerowicz-like figure to implement it. With a mushy economic program and Mahmoud Ben Romdhane – former deputy head of Tunisia’s ex-communist party, Ettajdid –as the key economic policy figure on the party, Nidaa Tounes offers neither.

Fragility of Tunisia’s Transition

The upcoming parliamentary election in Tunisia comes at a critical time. For a while, Tunisia was seen as a poster child for a successful transition away from authoritarianism. In Egypt, a widespread disappointment with an Islamic government resulted in a military coup last year. In contrast, when Tunisia could not get through a political impasse, the Islamic Ennahda party negotiated a handover to a caretaker government earlier this year, which has led the country to an early election.

Regardless of whether Ennahda can repeat its electoral success from three years ago or whether secular forces take over, the new Tunisian government will be in an unenviable position: it will have to address a growing security crisis in the country. In the past two years, the country has seen the emergence of political violence and terrorism perpetrated mostly by radical Salafist groups. Those violent efforts include the killings of two opposition politicians, Chokri Belaid and Mohammed Brahmi, as well as a car bomb plot foiled just last week.

Tunisia has also become a fertile ground for the recruitment of fighters of the Islamic State (ISIS). Some estimate that over 2,400 ISIS fighters are from Tunisia, which would make Tunisians the most numerous nationality fighting for ISIS. Restoring basic security, order, and rule of law—and preventing the country from descending into a full-fledged internal conflict—will have to be a priority for the new government.

The political violence may have multiple roots, but Tunisia’s poor economic performance is clearly one of them. In recent years, many strikes and protests over economic conditions have taken a violent turn and led to attacks on local police stations, for example.

While the West is confronted with problems posed by aging populations, Tunisia, like other countries in the region, faces the challenge (and opportunity) of harnessing the economic potential of an extremely young workforce. Practically half of Tunisians are under the age of 30, and many of them are struggling. Although unemployment is slowly falling, the unemployment rate among university-educated young Tunisians is over 30 percent, making their situation precarious.

Coping with the Legacy of Arab Socialism

Countries of the Arab Spring suffer from many economic, social, and political ills. At their center lies the unfortunate legacy of Arab Socialism, which established itself in the region during the 1950s and 1960s. One of its features, besides the ideology of Pan-Arabism and international ‘non-alignment,’ was an emphasis on government ownership and industrial planning. Far from generating prosperity and economic growth, these policies resulted in large, vastly inefficient government-operated sectors in several Arab economies. My new Cato Policy Analysis provides a sense of the magnitude of the problem and of its evolution over time:

In Egypt, for example, the share of government investment fell from around 85 percent in the late 1990s to below 40 percent in 2012. Over the same period of time, the share of government investment in Algeria doubled, from around 30 percent to above 60 percent. Throughout much of the same period, the average for lower-middle-income countries hovered under 30 percent.

Some Arab governments, most prominently Hosni Mubarak’s regime in Egypt, attempted to put in place large-scale privatization programs. However, these were perceived (and rightly so!) as attempts by the political elites and their cronies to simply seize publicly owned assets, without much regard for the future restructuring of the companies and their exposure to competition. My paper reviews the experience of privatization in other countries and tries to provide some practical lessons to policymakers in countries such as Egypt or Algeria.

First and foremost, privatization needs to be perceived as fair and transparent. Bidding should be competitive and open to a large spectrum of potential bidders, domestic and foreign. Second, private ownership of the financial sector is a requisite for successful privatization and restructuring of the rest of the economy–otherwise Arab countries risk creating a dangerous nexus of cronyism through which the state-owned banks and financial institutions would provide funding to newly privatized companies. Third, in order to avoid the danger of simply replacing government-run monopolies with privately-run ones, privatization should be far-reaching and accompanied by broad economic liberalization and opening up both to trade and investment.

Privatization is not very high on the agenda of Arab policymakers or foreign experts, and is typically eclipsed by the more immediate political concerns about the region. It is not, however, an issue that can be simply ignored.

It is a mistake to think that economic reforms can wait until Middle Eastern countries address their internal political and economic problems. There are not many examples of countries that have transitioned successfully to a representative constitutional government while maintaining economic rules that deny opportunity to large segments of the population. State ownership, accompanied by regulations that favor existing state-owned incumbents, are a critical part of the problem facing countries in the MENA region, most notably Egypt, Libya, Algeria, Syria, and Yemen

Egypt’s Shambolic Constitutional Process

Don’t let yourself be fooled by the overwhelming approval of the new Egyptian constitution in the referendum held earlier this week. While, according to preliminary results, the vast majority of roughly 37 percent of Egyptians who showed up at the polls backed the proposal, very little about the document itself or about the process through which it has come about is consistent with the idea of liberal democracy and limited government. Yesterday’s Bloomberg View editorial summarizes all one needs to know about the new constitution:

The armed forces would for at least the next eight years be independent of civilian control, including over their budget, as they were under former President Hosni Mubarak, himself an air force commander. Military courts would remain autonomous and would have jurisdiction over civilians in many instances. The hated police would also get greater independence, while the Supreme Court would be able to decide its size and membership for itself.

Neither should there be any illusions about the events leading to the adoption of the document. The referendum followed months of a deliberate crackdown on the opposition and disbanding of the largest political force in the country – not to speak of the arrests of activists of the ‘no’ campaign.

In short, Egypt seems to be coming full circle to where it was before the events of the Arab Spring, particularly if General Abdel Fattah el-Sisi announces his candidature for the country’s highest office. The question is how long the Egyptians are willing to put up with it.

As a side note, the constitutional process in Tunisia looks much more encouraging, although as Emmanuel Martin and I argue here, the new constitution is unlikely to be a an impetus for the badly needed economic reforms.

The President’s Next Middle East Speech

The news media is abuzz with speculation about what President Obama will say in an address this Thursday at the State Department. The topic is the Middle East, and White House Press Secretary Jay Carney explained, “we’ve gone through a remarkable period in the first several months of this year…in the Middle East and North Africa,” and the president has “some important things to say about how he views the upheaval and how he has approached the U.S. response to the events in the region.” The speech, Carney hinted to reporters, would be “fairly sweeping and comprehensive.”

If I were advising the president, I would urge him to say many of the same things that he said in his June 2009 speech in Cairo, this time with some timely references to the recent killing of Osama bin Laden, and an explanation of what the killing means for U.S. counterterrorism operations, and for our relations with the countries in the region.

Bin Laden and Ayman al-Zawahiri, al Qaeda’s long-time number two (now, presumably, its number one) railed for years about overthrowing the “apostate” governments in North Africa and the Middle East. And yet, one of the biggest stories from the popular movements that have swept aside the governments in Tunisia and Egypt, and may yet do so in Libya, Syria, Yemen, and Bahrain, is al Qaeda’s utter irrelevance. President Obama won’t need to dwell on this very long to make an important point.

The killing of Osama bin Laden doesn’t signal the end of al Qaeda, but it might signal the beginning of the end. In reality, al Qaeda has been under enormous pressure for years, but that hasn’t stopped the organization from carrying out attacks—attacks which have mainly killed and injured innocent Muslims since 9/11. It is no wonder that al Qaeda is enormously unpopular in the one place where bin Laden and his delusional cronies sought to install the new Caliphate. How’s that working out, Osama?

Al Qaeda had nothing to do with the reform movements that have swept across North Africa and the Middle East; the United States has had little to do with them either. That is as it should be. These uprisings were spontaneous, arising from the bottom up, and they are more likely to endure because they were not imposed by outsiders. Sadly, the same will not be said of the Libyans who rose up against Muammar Qaddafi, without any special encouragement from the United States. If the anti-Qaddafi forces ultimately succeed in overthrowing his four-decades long rule, President Obama’s decision to intervene militarily on their behalf ensures that some will question their legitimacy. The same would be true in Syria, or in Iran, if the United States were seen as having a hand in selecting the future leaders of those countries.

Barack Obama was elected president in part because he publicly opposed the decision to go to war in Iraq at a time when many Americans, including many in his own party, were either supportive or silent. He had a special credibility with the American people, and among people in the Middle East, because he worried that the Iraq war was likely to undermine American and regional security, cost hundreds of billions of dollars, and claim many tens of thousands of lives. Tragically, he was correct.

There is a right way, and a wrong way, to go about promoting human freedom. In Thursday’s speech, I hope that the president reaffirms the importance of peaceful regime change from within, not American-sponsored regime change from without.

The United States remains, as it has been for two centuries, a well-wisher to people’s democratic aspirations all over the world. But we learned a painful lesson in Iraq, and we should be determined not to repeat that error elsewhere. That is a message worth repeating, both for audiences over there, and for those over here.

Cross-posted from The National Interest

Mubarak Steps Down … Finally

Hosni Mubarak’s decision to step down as president of Egypt is welcome news. He could have taken a cue from Tunisia’s Zine El Abidine Ben Ali, resigning quickly in the face of overwhelming popular opposition. Such a move on Mubarak’s part would have avoided much of the confusion that has gripped Egypt for more than two weeks. At least 300 people have been killed during the protests, but thankfully Mubarak’s exit was achieved without even more bloodshed.

These protests were driven by popular discontent with Mubarak, rising food prices, rampant corruption, and limited political and economic opportunity. The Obama administration generally resisted calls to place the United States in the middle of what was a purely internal matter.

Those who called for a heavy-handed U.S. role in this whole affair—many of them the same people who have called for U.S. intervention in dozens of other places over the the past few decades—have been proven wrong once again. While the ideas of liberty are universal, the spark for change, and the energy that carries it forward, must come from within. The Egyptian people started this, and the Egyptian people should finish it.

Tunisia: An Omen for Other U.S.-Backed Regimes in the Muslim World

The sudden collapse of the Tunisian government on Friday underscores the turmoil toward which the Muslim world  seems inescapably drifting.  As I wrote earlier today at The National Interest Online:

Today, as during the Cold War, policy makers in Washington seem to expect economic growth to act as a substitute for political liberty, thereby ignoring the instinctive desire for freedom. Despotic leaders love to adopt pseudo-economic “reforms” to mask their coercive measures and perpetuate the status quo, but in the end, the institutionalized oppression imposed by ruling elites cannot be appeased in that way. Time will tell whether Tunisia and its neighbors evolve toward a freer and more prosperous future. But either way, human history confirms that fundamental change is a gradual and often painful process, and that more often than not forces erected to suppress individual freedoms eventually break down or unravel…

Check it out!