Tunisia’s democratic transition may face volatility in months ahead

Tunisia’s democratic transition may face volatility in months ahead

While Tunisia urges foreign investors to trust its “startup democracy,” the investments remain far from risk-free.

Three years after a young street vendor set himself on fire to protest the authorities’ harassment and corruption, three years after the citizens rose up and ejected their long-time autocratic leader, Tunisia has laid grounds for its democratic future. Amongst its peers of the Arab Spring, Tunisia has achieved something unique in the Arab world: making the parliament the centerpiece of political discourse while adopting one of the more liberal constitutions in the Middle East.

Against the backdrop of strained social fabric, Prime Minister Ali Larayedh, having reached an agreement with opposition parties, stepped down earlier this year and was replaced by Mehdi Jomaa, an independent technocrat who is leading a non-partisan caretaker government until the next election in October-November 2014.

The citizenry also adopted a new, widely debated constitution that was passed with the votes of more than 90% of the Constituent Assembly. Not only has the new constitution managed to strike a balance between the secular and religious aspects, it has also promised to guarantee equal rights for men and women while committing the Tunisian state to equal representation of women in all elected bodies – an unprecedented measure in the Arab world.

In the midst of a troubled region, Tunisia’s ability to broker compromise between those who espouse Islamist principles in government and those who want to keep religion out of pubic affairs continues to be a promising democratic example.

With these unprecedented developments, Tunisia’s prime minister has recently called for greater foreign investment to help support the country’s ailing economy and the transition to democracy. In a conference entitled “Investment in Tunisia: Startup Democracy,” Mehdi Jomaa has called investment in Tunisia “an investment in democracy, in peace and in all the Tunisians who reject extremism and believe in tolerance,” urging foreign investors to trust in Tunisia’s promising transitional outlook.

While Tunisia undoubtedly offers something unique in an unstable region, it is also far from a risk-free investment. The country’s dubbing of a startup democracy remains emblematic of the serious risks that are inherent in early stage business ventures to ensure sustainability and the country’s yet minuscule predictability.

The country’s economy continues to suffer significantly. The growth rate of 2.8% remains not even remotely enough to address the 17.7% unemployment rate and 15% of the population living under the poverty line – an increase from 10% in 2010. Current inflation levels also remain at the average of 7 percent, pushing the prices of food up and string social dissatisfactions.

The IRI Poll results on population perceptions on Tunisia’s democratic transition further reveal far from optimal results. According to the poll, since February 2014 unfulfilled expectations and the slow pace of economic growth have contributed to a 19 point increase (from 48% to 67%) in the percentage of people who think Tunisia is headed in the wrong direction. Although these numbers are better than the levels throughout 2013, the increase remains concerning for projecting confidence about the investment climate.

The IRI Poll also revealed Tunisians are mostly unsatisfied with their government’s pace of progress on the economy and unemployment. More importantly, the poll showed that the euphoria of democratic progress remains volatile once democratic achievements do not immediately yield solutions to the deep socioeconomic challenges, and Tunisians increasingly conflate economic problems with democratic ones.

In the run-up parliamentary and presidential elections in October-November, change in socioeconomic conditions in the short-to-medium term is unlikely. Together with the likely increase in violence from more radical parts of Tunisian society, to whom a successful Tunisian transition to democracy is antithetical to Ansar al-Sharia’s and other extremists’ vision for the country’s future, Tunisia’s stability may yet depend on its leaders’ focus on programs to strengthen short-term socioeconomic gains.

Tunisian perceptions of a working democracy are related to their economic well-being. With the economic outlook unlikely to change significantly in a short-to-medium term, the investment climate is likely to remain volatile and subject to social tensions in short-to-medium term.

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