* Slowdown after revolution worse than expected
* Protests, strikes hurting business
* Number of foreign firms leaving small, may rise
* Government says economic programmes disrupted
* May be bellwether for Arab Spring economies
By Tarek Amara
TUNIS, Feb 1 Last May, a public relations
agency hired by Tunisia's government placed an advertisement in
some of the world's leading newspapers and business magazines.
"Invest in Democracy," read the tagline.
The thinking behind the ads was to attract foreign
investment and revive the economy by harnessing the feel-good
factor attached to Tunisia after it ousted its autocratic
leader, triggering a series of revolts across the Arab world.
It was a good idea but so far, it hasn't worked.
Thirteen months after the revolution, the economy continues
to slump. Investment has slowed, tourism -- a mainstay of the
economy -- is down, unemployment is rising and the government's
target of 4.5 percent economic growth this year is looking
The problem, say businessmen and government officials, is
that people exercising their newfound freedom to protest for
better living conditions are bringing the economy to its knees
by staging almost daily strikes and sit-ins.
"Achieving a 4.5 percent growth rate in the current year is
becoming more difficult with every day that passes because the
sit-ins are causing huge economic losses," said Samir Dilou, a
spokesman for the new, Islamist-led government.
In effect, Tunisia's economy is stuck in a feedback loop:
people are protesting over poverty and unemployment, yet by
slowing the economy, they are entrenching the problems that
inspired the protests in the first place.
With a gross domestic product about the same size as that of
the Dominican Republic, Tunisia is not a global economic player.
But it could be a bellwether for how the economy will fare in
other, bigger states emerging from "Arab Spring" revolts,
The state of Tunisia's economy is likely to come into
sharper international focus when Christine Lagarde, managing
director of the International Monetary Fund, visits early this
Up to now, the narrative put out by Tunisia's new rulers has
been that the downturn is a temporary blip. Investors and
visitors were scared off by the instability following the
revolution and will return once they realise things are back on
track, the narrative runs.
That positive spin is becoming more difficult to sustain,
especially in the last few weeks as the release of economic data
for last year has shown the situation is worse than previously
The government started out forecasting GDP growth would fall
from 3 percent in the year before the revolution to around 1
percent in 2011. Later, this was revised downwards to between
0.2 percent and zero growth.
Last week, Minister of Regional Development and Planning
Jamel Gharbi said the economy had actually shrunk last year, by
1.8 percent. That compares poorly to Tunisia's fellow North
African states with comparable economies; Morocco grew roughly
4.5 percent last year and Algeria about 3 percent.
Tunisia's unemployment rate -- one of the biggest grievances
behind the revolution -- has gone up to 18 percent from 13
percent a year ago, and is much higher among young people.
"The revolution has made some gains, including in freedom of
expression, but the downturn continues," said Tunisian economist
"The structure of the economy is still the same in all
sectors...nothing has changed and the government is unable to
cope with high prices and unemployment. This is a very serious
There has been more bad news from the tourist trade,
Tunisia's biggest source of foreign currency and an industry
which employs about 400,000 people in a country of 10 million.
Foreign tourist numbers in 2011 were down by about 2 million to
4.4 million, an official at the Tourism Ministry told Reuters.
Earnings from tourism fell to 2.1 billion dinars ($1.4 billion)
last year from 3.2 billion dinars in 2010, the official said.
Phosphate exports are another important earner. The
government said this sector lost 1.2 billion dinars last year,
despite strong world prices for phosphates. The principal reason
is that in phosphate mining areas, protests are regularly
closing down mines and blocking the roads.
JOBS AND DIGNITY
One of those areas is Redayef, a mining town about 300
kilometres (190 miles) southwest of the capital Tunis, and near
the Algerian border. There, the revolution has changed little.
In 2008, people in the town protested to demand more
development and a bigger share of the revenue from phosphates.
Their action was unusual at the time because under Zine
al-Abidine Ben Ali, the president ousted last year, the police
cracked down ruthlessly on protests.
Last week, the town protested again over the same
grievances, paralysing the transport of phosphates.
"Redayef will announce (a campaign of) civil disobedience if
the government does not respond immediately to our demands for
jobs and dignity," local trade union leader Andan Haji said in
Roughly halfway between Redayef and Tunis, the town of
Makhtar held a six-day general strike in January to demand jobs
and public investment. Shops, factories and bakeries closed down
and roads were blocked.
It is a similar story in towns all over Tunisia's interior,
the deprived regions where last year's revolution began. In the
past few weeks, protests to demand jobs have disrupted the towns
of Ghar Dimaou, Beja, Jendouba, Kairouan, Nabeul, Tataouine and
Gafsa. In Sidi Makhlouf, 350 km south of Tunis, protesters
detained the provincial governor for several hours to press
their demands for jobs.
The Tunisian Union for Industry and Commerce has been
charting the impact of the unrest on business. It says 170
foreign enterprises have closed their operations permanently
since the revolution. That is a small fraction of the total
number of foreign firms operating in the country -- there were
3,135 in 2010, according to the investment promotion agency --
but the business association said many more firms could follow.
Prime minister Hamadi Jbeli, from the Islamist Ennahda
party, put it more colourfully. "Some foreign companies have put
the key under the door," Jbeli said in a speech to the interim
parliament last week.
TOUTING FOR INVESTMENT
The unrest this month spread to the presidential palace in
Carthage, outside Tunis. Dozens of people gathered in front of
the complex, a symbolic first because the area around the
presidential palace has for years been a heavily guarded citadel
off limits to ordinary people.
The new government is trying to respond. It has secured
billions of dollars in loans and aid from foreign governments
and international institutions to get it through the slump. The
prime minister and a team of his senior officials travelled to
the past week's World Economic Forum in Davos, Switzerland to
tout for investment.
The government has unveiled a programme of public investment
targeting the poorest and most restive parts of the country.
Employment Minister Abdel-Wahab Maatar said 250,000 jobs would
be created this year in the public and private sectors.
Yet the unrest is hampering the government's development
plans. "We now have about 260 projects ready, which will provide
about 30,000 jobs," said Jbeli. "But they are currently disabled
because of the security situation and the sit-ins."
His government is in a race against time. It needs to put a
lid on the protests and strikes in time for this year's tourist
season, or face a second year of costly cancellations.
Jbeli said the protests were being deliberately fanned by
political opponents unwilling to accept that, after decades of
strictly secular rule in Tunisia, an Islamist party had won a
democratic election and was now in power.
"They will not overthrow the government," he said. "The
government will not allow the threat of revolution and the law
will be imposed on offenders."
At least in Makhtar, the town that staged a general strike
in January, the prime minister's tough talk does not seem enough
to halt the unrest.
"Our patience has run out," said Ahmed Ben Faraj, a young
unemployed man in Makhtar. "We will not be intimidated by
government threats to use force...We will continue to protest
and we will lead a second revolution if we are not given the
right to work."