Tunisia’s economic problems still festering

An advisor to Tunisia’s main union confederation, the UGTT, warned that the economic problems that caused Tunisians to revolt against the country’s dictator last January are still festering, and the country’s new political leadership does not have a plan for addressing these problems.

Hassine Dimassi, an economist at Sousse University and a UGTT member, studied Tunisia’s economic problems prior to the revolt and found that the neoliberal economic policies of the old regime–policies recommended by the International Monetary Fund and the World Bank and implemented in the mid-1990’s by former president Zine el Abinde Ben Ali–caused uneven economic development that marginalized most the country, lowered wages, made work less secure, and failed to generate enough jobs to employ young people entering the workforce.

Unfortunately, most of the political parties vying for leadership have no plan to change the country’s economic direction. “The overwhelming majority of new parties, even now, have no social or economic program,” Dimassi told Al Jazeera in a recent interview. “In terms of development models there is almost nothing.”

Tunisia’s old development model was quite popular with the World Bank, the IMF, and the Davos Economic Forum. All praised the country’s economic development model that encouraged foreign development, created a flexible workforce, and lowered taxes on businesses.

Between the mid-1990s, when Ben Ali implemented the model, and the present, Tunisia’s economy grew at an annual rate of 6 percent and created a lot of wealth. But as Dimassi told Le Monde, “The problem with Tunisia is not the creation of wealth. . . but the division of wealth.”

For one thing, regional development is uneven. The center-west of the country, where the revolt began, has a high rate of unemployment, and the poverty rate is four times greater than the rest of the country.

Dimassi concluded that the regime’s economic policies were responsible for these and other economic ills. Ben Ali threw open the door to cheap imports from China, “which flooded the market and destroyed Tunisia’s traditional handicrafts, which was an important income for families, especially in rural areas,” Dimassi said.

Ben Ali quit making public investments in these regions; instead, he offered tax breaks and incentive to private businesses in hopes that private investment would spur development, but there were few takers.

With little public investment or private investment, there were few new jobs created. The lack of jobs, hit young people the hardest. Dimassi said that the Tunisian economy needed to create 60,000 new jobs a year just to employ young people graduating from college; instead, it created only about 25,000, which left about 300,000 college graduates without jobs.

Ben Ali changed the labor code, which lowered wages and made precarious work, such as temporary employment, more common. The new labor code allowed for more outsourcing of work, and as a result the use exploitative outsourcing contracts came into being. Dimassi calls these outsourcing contracts “a complete catastrophe.” Many businesses and some public agencies began outsourcing work like cleaning services to private companies, whose workers, according to Dimassi, were paid miserable wages and had no social security.

While Ben Ali’s economic policies created the conditions for revolt, Tunisia’s new leaders have no plan to address them. “The overwhelming majority (of new leaders) have not done any  analysis of the policies of the past 20 or 30 years,” Dimassi told Al Jazeera. “Instead, they have been preoccupied with slogans about freedom and the like. That’s good and necessary, but it’s not sufficient.”

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