“Security is a problem, and business is weak,” he says, in between serving soft drinks and cigarettes to a steady stream of customers. “We don’t have confidence in the interim government — they are too inexperienced.”
When Tunisians overthrew autocratic leader Zine Al-Abidine Ben Ali in January, they inspired revolts across the Arab world, and the country has since won praise from Western leaders as a beacon of democracy.
For the economy, the revolution has not been such a triumph. Strikes and violence have dented output, and investors worry that the vibrant but messy democracy Tunisia is now enjoying will not make for strong economic leadership.
“Tunisia has been so opaque for so many years, we have much less of an idea of what will happen politically than we do in, say, Egypt,” said Liz Martins, a senior economist at HSBC.
“What investors would like to see is a parliament with a mandate to enact strong laws and strong reforms, so you don’t have a large number of brand new, inexperienced parties all fighting each other for their own interests.”
“If you look at new democracies like Iraq, you often have legislative paralysis because they are all new parties, they don’t have experience of government. Investors like to see a strong government which is able to enact new legislation and bring in economic reforms.”
Many economists are optimistic that, if the new government manages to correctly leverage assets such as its well-developed infrastructure, proximity to Europe, and educated workforce, Tunisia could be one of North Africa’s success stories.
But that is a big task for politicians struggling to get a new administration off the ground, especially those inexperienced in global finance.
Seasoned economic managers are a rare commodity because most of those who served under Ben Ali are discredited and the new crop of politicians challenging to take over have never held any government office.
The main party leaders in Tunisian politics tend to be academics, activists and lawyers, rather than economists. “I know of Egyptians and other North Africans, but I can’t say I exactly come across Tunisians at the IMF or the World Bank,” one economist said.
Nearly 70 political parties are preparing to contest Tunisia’s first post-revolution election, for an assembly to rewrite the constitution. That assembly will decide the shape of the new government, and a timescale for more elections.
The date of the election is not yet certain. The government says it will be held on July 24, while election officials say that does not leave enough time and it will be on Oct. 16.
Radical party Ennahda, led by 69-year-old scholar Rachid Ghannouchi, is widely expected to poll well, while lawyer Najib Chebbi’s Progressive Democratic Party is also popular.
Whoever wins, they will be under pressure to foster stability quickly. The Tunisian economy is already expected to suffer a drop in growth this year to just 1-2 percent, according to internal forecasts, from nearly four percent last year.
In the recent revolutionary atmosphere, politicians said little about their long-term plans for growth.
“Ennahda, which is currently in the best position in the coming elections, is very vague regarding economic policy,” said Jean-Baptiste Gallopin of consultancy Control Risks.
“Its secretary-general frequently says that obviously the economy is an urgent matter in terms of relieving employment issues and cost of living issues, but the party’s broader, long term economic policy is less clear.”
Politicians will by fully aware of how important stabilizing the economy will be. The interim government’s initiatives to address urgent social issues, such as a $130 a month payment to job-seeking graduates, are expected to cost $2.1 billion, Standard Chartered analyst Philippe Dauba-Pantanacce said.
To finance this, the government has sought the help of the World Bank, to the tune of at least $1.5 billion, $500 million from the African Development Bank, and $100 million from France.
This is not, however, a long-term solution.
“In the very short term — three, six, nine months — the Tunisian government can basically do two things to mobilize external financing,” said Jacob Kolster, regional head for North Africa of the African Development Bank.
“One is to ask for grants and loans. Two is to quickly restore confidence in Tunisia so that foreign investors come back and start investing in Tunisia.”
Solid leadership with a focus on growth will be a key factor in this.
Tunisian central bank governor, Mustapha Kamel Nabli, is widely seen as a safe pair of hands for the economy. Shopkeepers and investors alike must hope the election brings several more.
