Tunisia – between instability and renewal

Last week Tunisia celebrated the eighth anniversary of its pro-democratic revolution. A few days later, it saw a massive general strike of workers in the public sector and state-owned companies, called by the powerful UGTT trade union. The conjunction of these two events provides a snapshot of the way Tunisia is now trying to navigate between competitive electoral politics and an economic situation that is, if anything, more difficult for the Tunisian people than before the 2011 revolution.

The UGTT organised the strike primarily to protest against the government’s plans to hold down public sector pay increases in this year’s budget. The government is offering a small rise spread over two years. With inflation running at 7.5 percent, the union argues that this offer effectively cuts its members’ standard of living. The UGTT has nearly 700,000 members and it says the vast majority stopped work last Thursday, bringing much of Tunisia to a halt. The UGTT has now announced that it will hold a further two-day strike in February.

The strike comes against the background of persistent economic problems in Tunisia. Even though the 2011 revolution was motivated in large part by socio-economic concerns, the governments that have held office since then have been unable to improve the situation. Growth has remained low, and unemployment is high: 15 percent of the population is without work, and the rate for those with a university degree is over 30 percent. Inequality between the more prosperous coastal region and the deprived interior of the country remains striking. Around half of all workers are employed in the informal economy. Many young Tunisians lack any prospect of being able to afford a home or a car, or of being secure enough to start a family.

It is an anomaly of the Tunisian political scene that the UGTT’s anti-austerity position has little representation among elected politicians

On top of these problems, Tunisia’s macro-economic situation has deteriorated badly in recent years. Faced with increasing debt and deficit levels and shrinking foreign currency reserves, Tunisia agreed a loan of $2.9 billion with the International Monetary Fund in 2016. The IMF called on Tunisia to cut public spending, overhaul its collection of taxes to raise government revenue, and allow the currency to depreciate. The IMF argues that it has been fairly flexible so far in enforcing public spending cuts, but it is now stepping up its pressure on the Tunisian authorities.

Public sector employment has traditionally been used in Tunisia as a way of containing economic discontent, and it was increased again after the revolution. Wages in the public sector account for 15 percent of GDP (up from 10 percent in 2010), so it is hardly surprising that the government is now trying to limit spending in this area. Yet it is doing this at a time when inflation (worsened by the deflation of the Tunisian dinar that the IMF has promoted) and subsidy cuts have already had a severe impact on people’s purchasing power.

The UGTT occupies an unusual place in Tunisian politics, as both a union and a quasi-political movement. Its stature was enhanced by the leading role it played in negotiating a compromise between Islamist and anti-Islamist political forces after a serious rise in polarisation in 2013 threatened to derail Tunisia’s transition (a role for which the UGTT, along with other civil society groups, was awarded the Nobel Peace Prize in 2015). When a European Council on Foreign Relations delegation met UGTT leaders in Tunisia last December, they spoke openly of opposing the government because they did not share its political vision. It is an anomaly of the Tunisian political scene that the UGTT’s anti-austerity position has little representation among elected politicians: the largest political groups (the Islamist Ennahda party and various offshoots of the secular-modernist Nidaa Tounes party) have backed the IMF agreement. There has been speculation that the UGTT may build on its openly political positioning by launching a political wing or endorsing candidates in forthcoming elections.

Some political leaders criticise the UGTT for exercising a veto power over public policy that goes beyond classic issues of labour relations. In the view of these politicians, the UGTT’s demands are peripheral to some of Tunisia’s most fundamental economic problems. It is increasingly agreed that unemployment and the proliferation of grey-sector jobs are linked to structural biases in the economy that systematically favour a small group of politically connected businesses. Measures that might address this problem include increasing access to credit for would-be entrepreneurs, changing regulations and practices within the public and banking sectors that are tilted to a narrow elite, and reducing corruption. According to Tunisians, corruption has not been reduced but only “democratised” since the revolution. Investment in infrastructure serving disadvantaged parts of the country could also help spur more inclusive growth.

The political class has barely begun to work on these issues in the last eight years. Nor is it likely that much progress can be expected in the next 12 months, as Tunisia prepares for parliamentary and presidential elections to be held before the end of 2019. The country’s politics are increasingly contentious. After the previous elections in 2014, Ennahda and Nidaa Tounes reached an agreement that saw Ennahda become a junior partner in Nidaa-led governments. This consensus produced political calm at the expense of significant reform: unchallenged by any strong opposition, the cosy duopoly became the guardian of the status quo.

In recent months, this arrangement has broken down. Nidaa Tounes has fractured as a result of tensions between Tunisia’s president Beji Caid Essebsi (the party’s founder) and the prime minister, Youssef Chahed. Cut loose from Nidaa Tounes, Chahed is now looking to start his own party. Ennahda’s continued support for Chahed’s premiership has in turn led to the breakdown of its consensus with Nidaa Tounes, and to increasingly charged attacks against Ennahda by the remaining leaders of Nidaa Tounes. Against this background, Chahed may lack the political strength and commitment to face down the UGTT’s demands or to pursue reform measures that could alienate influential vested interests.

Since the revolution, the overarching priority of political life in Tunisia has been to seek enough stability to preserve and complete the political transition. Much has been achieved, though a few important steps (notably the establishment of a Constitutional Court) remain unfulfilled. But Tunisia has now reached a point where the greatest threat to stability is no longer political rivalries around religious identity but unmet social and economic aspirations. Until now, the country’s political parties have not organised themselves to offer distinctive and coherent visions of how Tunisia’s socio-economic development can be improved, and they are paying the price in public alienation from the entire political system. The test of Tunisia’s political maturity will be whether, in this year’s elections and after, the parties can finally bring themselves to take up this task.