Abstract
Since January 2011, the ninth successive Tunisian government dedicated specific social programs and mechanisms in the objective to send short-term positive signals while trying to undertake critical structural reforms. Despite several positive measures and governmental actions, the economy is still suffering from slow progress in implementing the economic reforms, overwhelming corruption and weak business environment. This chapter begins by exploring the current economic reforms’ agenda and presents the ongoing comprehensive macroeconomic reform program which is supported by the International Monetary Fund. Then, it delves into the factors explaining the resistance to change and questions the ability of the state’s institutions to conduct effective and fair integrated reforms. It finally analyzes the structural factors that are preventing the transformation of the Tunisian economy: (1) lack of an integrated development strategy, (2) lack of consensus and weak institutional capacities and (3) extractive political institutions.
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- 1.
As noted previously, the “voice and accountability” pillar of the governance indicators has clearly improved contrarily to the other pillars of the governance indicator.
- 2.
The Council of Economic Analysis of the Presidency of the Government published in January 2016 a report about the “Major National Economic Reforms for the period 2016–2020”. The report develops the main pillars of the reforms: improving the financing of the economy, reinforcement of the budgetary equilibrium, development of the human resources, renewal of the social protection system and reinforcement of the institutional and regulatory framework.
I have participated in the first stage of the production of the development plan 2016–2020 through a consultation in 2014 ordered by the UN-ESCWA for the benefit of the Tunisian Government. The report I delivered was entitled “Structural reforms for the Tunisian Economy: A smart matrix”. It was the result of a detailed and methodological analysis of 12 strategic reports developed by various actors: the civil society (UTICA, UGTT and independent experts), the main political parties and the government agencies. I have constructed a smart matrix covering the priority structural reforms classified into three categories: institutional reforms, industrial reforms and economic programs with a geographic dimension. In cooperation with colleagues from ITCEQ and my students from Tunisia Polytechnic School (in the context of their End of Studies Project) we have generated multiple scenarios and simulated their economic impacts as well as their financing needs.
- 3.
As we will note in the next chapter, this transformation is not an easy task as it requires the conjunction of policy choices based on the following fundamentals: inclusive social contract, inclusive national identity and narrative, and inclusive social covenant. The policy choices are multidimensional in relation to the rule of the law, security, education, transitional justice, elections and political party, institutional design, political dialogue, taxation and the administration of public resources, nation-building programs and economic growth.
- 4.
This recalls me the introductory remarks in “Rethinking economics after the crisis” by Benoit Coeuré in June 2014. He noted that economists tend to progress step by step toward answering the bigger questions which interest the policy makers. At the opposite, the latter have a different temporality and need short- and medium-term actions in response to complex questions. It also recalls me the remarks of one of the political leaders of Tunisia, Ahmed-Néjib Chebbi, during the Forum of the Future of the Tunisian Association of Economists in February 2016. After assisting to a plenary session about the long-term challenges of Tunisia and the need for drastic structural adjustments to cope with the changing trend of the labor force, he asked the panelists about the short-term economic urgency and how to fulfill people’s expectations mainly in the disadvantaged regions. Benoit Coeuré is Member of the Executive Board of the European Central Bank. His entire speech is available here https://www.ecb.europa.eu/press/key/date/2014/html/sp140624.en.html.
- 5.
A consortium of four organizations: The Tunisian General Labor Union (UGTT), the Tunisian Confederation of Industry, Trade and Handicrafts (UTICA), the Tunisian Human Rights League (LTDH) and the Tunisian Order of Lawyers.
- 6.
The main issues were unemployment, taxation policy, social transfers, role of the state, role of the private sector, institutionalizing the social dialogue, reform of the administration and the social security system.
- 7.
From Harvard University on the occasion of the Economic Research Forum Annual Conference in Egypt in March 2011.
- 8.
On the occasion of my participation in the meeting of the Council of Economic Advisory of the Presidency of the Government (chaired by the President of the Government in June 2016), I have had the opportunity to raise the importance of developing an efficient communication strategy in order to restore the confidence of the citizens, especially during the transition period. Among the suggested ideas are developing an interactive map of the country (encompassing the 24 governorates), enabling the user to discover the planned projects and public investments, as well as the achievements and the progress. I have also suggested improving communication about the priority subjects which interest the citizens: the fight against corruption, the governance of the state-owned enterprises, the modernization of the administration, the solution to the chronic deficit of the pension system, the tax evasion and the informal economy. I have also stressed the importance of improving the coordination between the Ministry of Finance, the Ministry of Development and International Cooperation and the Central Bank of Tunisia.
- 9.
In the blog of the Institute for New Economic Thinking in February 2016. See https://www.ineteconomics.org/perspectives/blog/people-have-had-enough-of-experts.
- 10.
The article criticizes the functioning of the policy-making institutions in developed countries mentioning how they have been captured by vested interests.
- 11.
In the absence of a credible national institution capable of communicating efficiently and transparently about the economic situation, the economic policies’ choices and the progress toward the implementation of the reforms, the media often invited experts who criticized the economic choices from a political opposition lens. The systematic “opposition” of some experts has to some extent fueled the ambiguity in the future of the economy.
- 12.
In the case of Colombia, Acemoglu and Robinson (2012) observe that the economic and political institutions have become more inclusive progressively. However, they note that major extractives dimensions such as lawlessness and insecure property rights remain due to the lack of control by the national state in many parts of the country. They explain this fact by the prevailing vicious circle: the lack of incentives for politicians to provide public services and law and order in many parts of the country. They also argue that the existing political institutions do not put enough constraints on politicians to prevent their collusion with paramilitaries and thugs (Acemoglu and Robinson, 2012).
- 13.
He advocated a modernization approach à la developed countries in the nineteenth century that he baptized “capitalism 1.0” with the following components: rights against the government, property rights, rights of contract, rule of law, local banks supporting local entrepreneurs, financial firms supplying venture capital, free entry of new companies into industries and so on. In addition, respect of individual rights, tolerance toward differences and acceptance of competition are stressed as important values that shall be shared in the society for the modernization process to succeed.
- 14.
Yet, the building of the new institutions and the implementation of the new spirit—of designing reforms for the benefit of the entire society and not for privileged groups—is still an unachieved long process as exemplified by the tugging around the rules governing the decisions of the newly created independent Supreme Judicial Council.
- 15.
According to a study conducted in 2014 by the World Bank and the Tunisian National Youth Observatory, the trust in politics was quantified to less than 5% among the young in the rural regions and around 30% in the urban regions. The average scores of trust in police, justice, military and family were respectively around 50%, 60%, 80% and 100% (World Bank, 2014). In March 2017, the blogger Mhamed Mestiri tried to answer why many skilled young Tunisians are still leaving the country. He focused on the profile of four different individuals who tried to contribute to the development of their country but finished by leaving it. They cited the following common factors: the absence of equal economic opportunities and the unfairness in professional promotion (Mestiri, 2017).
- 16.
In commenting on the success of his government in undertaking the delicate reform of the social security system in his country, the prime minister of Turkey declared in 2013 that “the people need to be able to trust those who govern them and not feel that their interests are being betrayed. Without that trust, we would not have been able to make the very difficult readjustments in our social security system” (Erdogan, 2013).
- 17.
According to the definition of OECD/DAC (2007), states are fragile when there is a lack of political will and/or capacity to reduce poverty, to generate development and to guarantee the security and human rights of their populations.
- 18.
TPS is a public Engineering School founded in June 1991, and welcomed its first students in September 1994. The school is accessible only to the top 50 ranked students selected among more than 2000 students who pass a competitive national exam following two years of intensive university-level preparation in mathematics and physics after the Baccalaureate.
- 19.
The report can be downloaded here: https://goo.gl/bNFBWo. See also the article “Révolution à l’École Polytechnique” by Tahar Abdessalem, Romain Bordier and Jonathan Nussbaumer for a presentation of the reform http://goo.gl/1UkvRS.
- 20.
See the article “69 universitaires, experts et dirigeants appellent à la réforme de l’Ecole Polytechnique de Tunisie”, Leaders.com.tn, News 19 January 2016.
- 21.
The reform of the curriculum improved the chances of the TPS students to compete for internships and jobs at the international level in multiple domains (e.g. data science, financial engineering, supply chain management, IT, electronics and mechanics).
- 22.
Not only in TPS but also in other engineering schools, as the ministry itself published a report in October 2015—produced by an ad hoc independent committee of experts—joining several recommendations of the TPS’s report published in October 2014.
- 23.
Including a comprehensive cooperation with an economics school ranked within the top 200–300 by the Times higher education world university rankings.
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Nabi, M.S. (2019). The Economic Reforms’ Agenda and Bottlenecks. In: Making the Tunisian Resurgence. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-13-3771-0_3
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DOI: https://doi.org/10.1007/978-981-13-3771-0_3
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